Production Planning System with Variable Demand and Stochastic Machine Breakdown

In this paper, the economic production is considered by considering defective products during production, a percentage of which can be recycled at a fixed cost, also machine failure, and variable demand. It is assumed that the products are produced at a fixed rate, but the machine may break down during production. Machine failure during production is a random variable that follows an exponential distribution with a specified parameter. If the machine breaks down during production, production stops immediately and the machine is repaired, and this study assumes that the machine repair time is a fixed value. Also, unlike the classical models, the demand for the manufactured product is expressed as a non-incremental function of time. The main goal is to determine the optimal policies for reproducing the problem in such a way that the total annual cost is minimized. For this purpose, first, a mathematical model is presented, then, the average cost per unit of time is determined, and based on the concepts of global optimization, the optimal values are determined. Finally, by solving a numerical example, the problem is analyzed. The results show that, the repair time has a great impact on the cost of the entire system, and as it increases, the system cost increases exponentially.