Joint optimization of production lot-sizing and condition-based maintenance in an imperfect production process with dependent indicators

ABSTRACT This paper addresses the integrated optimization of the economic manufacturing quantity and the condition-based maintenance policy of a deteriorating manufacturing system. The considered facility produces a single type of product and is inspected at the end of each production run. Upon inspection, two dependent indicators are revealed: one implies whether the production process is in control or not and the other one represents the deterioration level of the facility. The dependence between the two indicators is that whenever the facility deterioration exceeds a pre-determined level, the system becomes more vulnerable such that the production process may switch to the out-of-control state. In the out-of-control state, a proportion of defective items is fabricated. Considering the inter-dependencies between production process and machine degradation, this paper develops an integrated production and maintenance model to minimize the overall cost. The expected cost rate in the long run is taken as the objective function to assess the proposed model, where the joint optimization of the lot-sizing and the maintenance policy is developed. The problem is formulated in the context of a semi-Markov decision process and solved with the successive approximation method. A numerical example is given to illustrate the applicability of the proposed model.