An economic production quantity model for a deteriorating system integrated with predictive maintenance strategy

Abstract

While there has been considerable work over the years on the basic deterministic economic production quantity (EPQ) and its derivative models, there have been few extensions of these models that recognize the potential effects of machine degradation. As maintenance activities can keep machines in good operation, it should be integrated into EPQ models to meet real situations. Due to machine degradation, this paper integrates predictive maintenance into EPQ model in which autoregressive integrated moving average model is adopted to predict system's healthy indicator. Moreover, two kinds of system out-of-control states are considered in this proposed EPQ model: in State I, the system produces non-conforming items; and in State II, the system fails. Aiming at minimizing the expected average total cost and optimizing the EPQ, suitable maintenance intervals and frequency are determined prior to any predicted failure. Finally, a case study is presented and the computational results are discussed to show the efficiency of this integrated EPQ model.