Optimal Production Policies for Imperfect Processes with Repair, Rework, Outsourcing and Preventive Maintenance

This study integrates maintenance and production programs into the economic production quantity (EPQ) model for an imperfect process characterized by a deteriorating production system with an increasing hazard rate. Perfect repair and rework procedures are implemented following a production run failure. In such an imperfect process, defective items are produced and reworked and some are rejected after rework. The study evaluates the conditions of an EPQ model involving outsourcing to compensate for production shortfalls caused by waste products during reworking. Preventive maintenance (PM) is conducted after the “controlled” production phase and is categorized into renewal and regular PM. The probability of renewal PM is influenced by the number of regular PMs performed since the last system update cycle. The EPQ model is thus developed to determine the optimal production run time by minimizing total costs. Various cases are explored. A numerical example and sensitivity analysis will be presented to illustrate the model’s effectiveness. The findings indicate that enhancing maintenance capabilities can significantly lower production costs. Implementing a PM program contributes to a more efficient production system operation.