Inventory management is ultimately concerned with when and how much to order in response to some uncertain information on demand and product. Fbr example, Cheung and Zhang categorized customer order cancellation as uncertain inforrnation and studied the impact of customer order cancellation on a periodic review (s,S) inventory model. On the other hand, the presence of defects in products is also one of uncertain information having an influence on the inventory policy. Defective products in

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... tories brings not only unnecessary inventory cost, but also the defective products being passed on to the customer results in a Ioss. Therefore, defective products should be removed through inspection in order to avoid unnecessary cost and loss. At the same time, a shortage of inventory may be caused by removing defective products. Then, the purpose of this article is to consider the (s,S) inventory policy under uncertain information as the presence of defective products in addition to the customer order cancellation studied by Cheung and Zhang. We define the total cost function for the (s,S) inventory model and consider the optimal (s, S) inventory policy under the defined total cost function through some numerical examples.