Logistic planning of rework with deteriorating work-in-process

Rework is described as the transformation of production rejects into re-usable products of the same or lower quality. Rework can be very profitable, especially if disposal costs are high and if materials are expensive and limited in availability. Furthermore, rework can contribute to a 'green image'. Although there is quite a lot of literature on logistic planning and control of rework, up to now no attention has been paid to rework of production rejects that deteriorate while waiting to be reworked. Such situations occur, for example, in the food industry. This paper deals with the above in a production line that is dedicated to a single product and that uses the same facilities for production and rework. Produced lots may be non-defective, reworkable defective or non-reworkable defective. Reworkable defective lots deteriorate over time, which effects the rework time and the rework cost. We consider a disposal strategy and two types of rework strategies. We derive expressions for the average profit per time unit, including costs for production, rework, disposal, procurement of input materials, and storage of reworkable defective lots. Using those expressions, the strategies can be compared numerically, as is illustrated for a few examples.

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