ABSTRACT This paper presents a methodology for the inventory planning of a two-machine series system, wherein the first and second machines are designated as the upstream and downstream machines, respectively. The upstream machine commences production in the in-control state, and after a period of time, it may transition into an out-of-control state. In such circumstances, the rate of non-conforming items rises significantly. In consideration of the mechanical nature of the process, the time-to-shift variable is presumed to follow a Weibull distribution. Therefore, the upstream machine needs to be overhauled after a set time. During the implementation of overhaul activity, the upstream machine ceases to operate. A delayed buffering-monitoring policy is developed with three goals: (1) The creation of an intermediate buffer between two machines serves to prevent the interruption of the production line utilized by the downstream machine; (2) the reduction of the manufacturing costs, particularly the buffer inventory holding cost; and (3) the shift detection in the upstream machine through successive inspections. Furthermore, a restoration activity is implemented with the objective of returning the upstream machine condition to an in-control state. To do this, one spare part is consumed, which can be purchased under an incremental discount policy.
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