Ok so it's been said the longer a dweller is out in the wasteland, the better the items found are. However, that hasn't been holding up on my game. I have a level 50 max-stats legendary dweller armed with an enhanced Fatman out for 3 days and the rare gear found was within the first 8 hours of being out and the rest was common items a level 1 dweller can get in the first hour. It seems the the item generation is purely random rather than mixing time into it.