Two-stage production plan of probabilistic market demand with unreliable machines and obtainable working hour capacity

Abstract

The Two-Stage Production Plan (TSPP) Model for reaching the optimal production rate of each stage undergoing the considerations of probabilistic market demand, future obtainable working hour capacity of each stage and unreliable machines is proposed in this paper. It is exactly applied to evaluate the optimal production speed in reducing the risk of future uncertainty. In addition, the time interval of production, maintenance cost of an unreliable machine, transaction, penalty, holding costs, sales price and the machine reliability are taken into considerations. Moreover, sensitivity analyses for the key variables of optimal solution are also presented. Accordingly, this study effectively provides a dynamic tool capable of controlling the production plan (rate) at any time for the production planner with great insight.