Multi-Product Production System with the Reduced Failure Rate and the Optimum Energy Consumption under Variable Demand

Shaktipada Bhuniya, Biswajit Sarkar and Sarla Pareek
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Shaktipada Bhuniya: Department of Mathematics and Statistics, Banasthali Vidyapith, Banasthali, Rajasthan 304 022, India
Biswajit Sarkar: Department of Industrial & Management Engineering, Hanyang University, Ansan Gyeonggi-do 15588, Korea
Sarla Pareek: Department of Mathematics and Statistics, Banasthali Vidyapith, Banasthali, Rajasthan 304 022, India

Mathematics, 2019, vol. 7, issue 5, 1-20

Abstract: The advertising of any smart product is crucial in generating customer demand, along with reducing sale prices. Naturally, a decrease in price always increases the demand for any smart product. This study introduces a multi-product production process, taking into consideration the advertising- and price-dependent demands of products, where the failure rate of the production system is reduced under the optimum energy consumption. For long-run production systems, unusual energy consumption and machine failures occur frequently, which are reduced in this study. All costs related with the production system are included in the optimum energy costs. The unit production cost is dependent on the production rate of the machine and its failure rate. The aim of this study is to obtain the optimum profit with a reduced failure rate, under the optimum advertising costs and the optimum sale price. The total profit of the model becomes a complex, non-linear function, with respect to the decision variables. For this reason, the model is solved numerically by an iterative method. However, the global optimality is proved numerically, by using the Hessian matrix. The numerical results obtained show that for smart production, the maximum profit always occurs at the optimum values of the decision variables.

Keywords: inventory; smart production; variable demand; advertisement; energy; rework; system reliability (search for similar items in EconPapers)
JEL-codes: C (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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