Cost-effective production policy for a stochastic unreliable manufacturing system

^** Email: dohi{at}rel.hiroshima-u.ac.jp The paper deals with an economic manufacturing quantity (EMQ)problem for an unreliable manufacturing system in both continuous-and discrete-time settings. The time to machine failure andcorrective and preventive repair times of the production facilityare assumed to follow arbitrary probability distributions. Thetraditional method of determining the EMQ policy for a failure-pronemanufacturing system is based on the minimization of the long-runaverage cost in the steady state. In this paper, an alternativecriterion of optimality called cost effectiveness is introduced.The criteria for the existence and uniqueness of the optimalproduction time maximizing the cost effectiveness are derivedanalytically under general failure and specific repair (correctiveand preventive) time distributions. The optimal cost-effectiveand average cost production policies are numerically calculatedand compared in terms of their performances.