Optimizing the integrated economic production quantity for a stochastically deteriorating production system under condition-based maintenance

This paper proposes a new integrated economic production quantity (EPQ) and condition-based maintenance (CBM) model for a stochastically deteriorating production system. Inspections are performed periodically to measure the real time degradation. The system fails (out-of-control) whenever its degradation is beyond a critical threshold level. In the out-of-control state, a proportion of nonconforming items are produced. To assess the degradation of the system and to increase the production of conforming items, preventive maintenance (PM) actions are carried out. An integrated EPQ and CBM optimization model that minimizes the total expected cost rate over an infinite time horizon is developed. The objective is to determine a joint optimal EPQ and PM strategy minimizing the sum of inspection/maintenance and setup costs, cost of nonconforming items in addition to inventory holding cost. Numerical experiments are provided to illustrate the proposed approach

Integrated production quality and condition-based maintenance optimisation for a stochastically deteriorating manufacturing system

This paper investigates the problem of optimally integrating production quality and condition-based maintenance in a stochastically deteriorating single- product, single-machine production system. Inspections are periodically performed on the system to assess its actual degradation status. The system is considered to be in ‘fail mode’ whenever its degradation level exceeds a predetermined threshold. The proportion of non-conforming items, those that are produced during the time interval where the degradation is beyond the specification threshold, are replaced either via overtime production or spot market purchases. To optimise preventive maintenance costs and at the same time reduce production of non-conforming items, the degradation of the system must be optimally monitored so that preventive maintenance is carried out at appropriate time intervals. In this paper, an integrated optimisation model is developed to determine the optimal inspection cycle and the degradation threshold level, beyond which preventive maintenance should be carried out, while minimising the sum of inspection and maintenance costs, in addition to the production of non-conforming items and inventory costs. An expression for the total expected cost rate over an infinite time horizon is developed and solution method for the resulting model is discussed. Numerical experiments are provided to illustrate the proposed approach

An optimal two-level supply chain model for Small- and Medium-sized Enterprises (SMEs) considering rework for new products and price-dependent demands

With the advent of new technologies, several factors such as globalization of markets, customers' different needs, and increasingly fierce economic competition have encouraged Small- and Medium-sized Enterprises (SMEs) to improve their engagement with suppliers and to involve themselves with cost management practices in order to survive. SMEs clearly need to focus on the interests of the entire supply chain by enacting win-win policies. In this regard, the present study investigated a two-level inventory model featuring a manufacturer and a buyer in the competitive market with the policy of producing new products. The proposed model took into account imperfect and low-quality products and their capacities for rework. In other words, due to the competitive nature of the market, any increase in prices would lead to a decrease in demand. The mathematical model was proposed in two scenarios: one with the possibility of shortage and one without it. The objective function of the mathematical model revolves around maximizing the total profit of the supply chain considering both independent and joint optimization by the supply chain members. A new algorithm was then proposed to solve the mathematical model whose applicability was evaluated by using a numerical example in the analysis software MATLAB as the input. The results were then analyzed and discussed based on a sensitivity analysis approach

Coordination of pricing, inventory, and production reliability decisions in deteriorating product supply chains

In this article, we study a two-level supply chain model for deteriorating items, in which the supplier’s production system is unreliable and the retailer’s demand is price-sensitive. The supplier’s production line may randomly shift from the in-control state to the out-of-control state. When the production line is in the out-of-control state, a proportion of the produced products will have bad quality. To mitigate the out-of-control risks, the supplier can improve the production line reliability by investing in high-quality machines, highly skilled workers, or advanced maintenance technologies. We start with the study of pricing and inventory problems concerning endogenous reliability in the integrated and decentralised scenario. To better illustrate the proposed models, two applicable algorithms are designed to determine the optimal production reliability, ordering quantity, and prices. Then, a cooperative reliability investment and revenue-sharing contract is proposed to coordinate the supply chain. Numerical examples and sensitivity analysis of the equilibrium strategies and coordinating results on key system parameters (e.g. deterioration rate, production rate, etc.) are given to verify the effectiveness of the contract, and meanwhile get some managerial insights