Abstract
This study considers manufacturing cost, inventory holding cost, system setup and maintenance costs, restoration cost, and warranty cost to a deteriorating production system whose state can be classified into in-control or out-of-control state at any time. This study develops a framework of simultaneous determination of optimal production run length and maintenance schedule and shows that there exists a unique optimal production run length and scheduled maintenance policy that minimize the expected total cost per item. The mathematical conditions to the optimal production run length and scheduled maintenance policy for a production cycle are deduced.
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