The classical lot sizing problem, also known as the economic order/manufacture (EOQ/EMQ) quantity model, has captivated the attention of researchers since the earliest decades of the past century. The simplistic assumptions of the EOQ model that make its mathematics easy to use and understand is probably why the
EOQ problem has been widely accepted and used by researchers and practitioners alike. Harris (1915) is assumed to be the first to provide a scientific approach to inventory management by developing the EOQ square root formulae. Since, there has been a plethora of work that extended upon the work of Harris with a reasonably good survey of these works provided in Silver, Pyke, and Peterson (1998). These extensions relaxed one or more assumptions inherent in the EOQ model to develop mathematical models that more closely conform to real-world inventory systems. Among these assumptions is that items produced and stocked are of perfect quality. This is an unrealistic assumption since the product quality is directly affected by the reliability of the production process (Cheng, 1991). Readers may refer to the work of Wright and Mehrez (1998) who provided a taxonomy of the research that includes the relationship between quality and inventory.