A hybrid finite production rate system featuring random breakdown and rework

Singa Wang Chiu, Hui-Cun Chen, Hua-Yao Wu and Yuan-Shyi Peter Chiu

Operations Research Perspectives, 2020, vol. 7, issue C

Abstract: To reduce the order response time or achieve optimal utilization, manufacturers often include an outsourcing alternative in their production plans. Further, undesirable machine breakdowns and nonconforming items produced during the in-house processes must also be effectively managed/corrected to adhere to the fabrication schedules and meet the desired quality level. This study addresses the aforementioned concerns by examining a hybrid finite production rate (FPR) system featuring: breakdown that follows the Poisson distribution, and rework/repair of all the nonconforming goods produced. A portion of the batch size is outsourced to an external supplier, who guarantees quality but at a higher unit cost than that incurred in-house. A mathematical model is explicitly built to represent the features of the proposed hybrid FPR system. We use the optimization approach and an algorithm to determine the optimal replenishing runtime that minimizes total costs; results are demonstrated through a numerical example and sensitivity analyses. Diverse crucial system information available to assist manufacturers in production planning includes the individual and joint influence of rework, outsourcing, and breakdown on: (a) variable rework cost; (b) the optimal runtime; (c) total system cost; (d) utilization; (e) detail of system's cost elements; and (f) other important system parameters.

Keywords: Hybrid inventory system; Finite production rate; Rework; Random breakdown; Partial outsourcing; Production management (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S2214716019301897
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:oprepe:v:7:y:2020:i:c:s2214716019301897

DOI: 10.1016/j.orp.2020.100142

Access Statistics for this article

Operations Research Perspectives is currently edited by Rubén Ruiz Garcia

More articles in Operations Research Perspectives from Elsevier
Bibliographic data for series maintained by Catherine Liu ().