IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v40y1992i5p959-971.html
   My bibliography  Save this article

Production Batching with Machine Breakdowns and Safety Stocks

Author

Listed:
  • Harry Groenevelt

    (University of Rochester, Rochester, New York)

  • Liliane Pintelon

    (Katholieke Universiteit Leuven, Leuven Belgium)

  • Abraham Seidmann

    (University of Rochester, Rochester, New York)

Abstract

We study the problem of selecting the economic lot size for an unreliable manufacturing facility with a constant failure rate and general randomly distributed repair times. Safety stocks must be used to meet the managerially prescribed service level (the fraction of lost sales) because these stochastic interventions reduce the effective production capacity. We develop bounds on the range of feasible service levels and investigate the impact of several system parameters on this range. We introduce an easily implementable production control policy (but do not establish the optimality of its structure) and prove that under this policy the safety stock dynamics can be characterized fully by a renewal process analogous to the workload process of a special single server queueing system. This analogy is exploited in deriving exact and approximate expressions for the safety stock holding costs. Several operational insights are revealed by experimenting with the models developed here. We show how the results can be incorporated in a broader management framework for evaluating resource allocation decisions aimed at reducing the failure rate of the machines. A clear tradeoff is shown to exist between the overall investment in increasing the maintenance level and the resulting savings in safety stocks and repair costs.

Suggested Citation

  • Harry Groenevelt & Liliane Pintelon & Abraham Seidmann, 1992. "Production Batching with Machine Breakdowns and Safety Stocks," Operations Research, INFORMS, vol. 40(5), pages 959-971, October.
    • Handle: RePEc:inm:oropre:v:40:y:1992:i:5:p:959-971
    DOI: 10.1287/opre.40.5.959
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/opre.40.5.959
    Download Restriction: no
    File URL: https://libkey.io/10.1287/opre.40.5.959?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:oropre:v:40:y:1992:i:5:p:959-971. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.