Abstract
This paper is concerned with determination of optimal lot size for an economic production quantity model with scrap and random breakdown occurring in backorder replenishing period. In most real-life manufacturing systems, generation of defective items and random breakdown of production equipment are inevitable. To deal with the stochastic machine failures, production planners practically calculate the mean time between failures (MTBF) and establish the robust plan accordingly, in terms of optimal lot size that minimizes total production-inventory costs for such an unreliable system. Random scrap rate is considered in this study, and breakdown is assumed to occur in the backorder filling period. Mathematical modeling and analysis is used and the renewal reward theorem is employed to cope with the variable cycle length. An optimal manufacturing lot size that minimizes the long-run average costs for such an imperfect system is derived. Numerical example is provided to demonstrate its practical usages.
Highlights
Becoming a low cost producer is one of the main operation strategies and goals of most manufacturing firms
This study is concerned with determination of optimal lot size for an economic production quantity (EPQ) model with scrap, shortages allowed and backordered, and random breakdown occurring in backorder-filling period
This paper considers a manufacturing process with the following features: (1) It may randomly produce x portion of defective items at a rate d. (2) All imperfect quality items are assumed not repairable, are treated as scrap
Summary
Becoming a low cost producer is one of the main operation strategies and goals of most manufacturing firms. While the second policy considers that the production of the interrupted lot will be immediately resumed (called abort/ resume (AR) policy) after the breakdown is fixed and if the current on-hand inventory falls below a certain threshold level Both of their proposed policies assume that the repair time is negligible and they studied the effects of machine breakdowns and corrective maintenance on the economic lot sizing decisions. Chiu et al [30] investigated the optimal run time for EPQ model with scrap, rework and random breakdown They proposed and proved theorems on conditional convexity of the integrated cost function and on bounds of the production run time. This study is concerned with determination of optimal lot size for an EPQ model with scrap, shortages allowed and backordered, and random breakdown occurring in backorder-filling period. Since little attention was paid to the aforementioned area, this paper intends to bridge the gap
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