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Abstract
In this paper we study the determination of the optimal maintenance policy for a manufacturing facility and the optimal
buffer inventory to satisfy the demand during the interruption period due to a maintenance action. We consider the
possibility of imperfect production and that opportunities for the fabrication of the buffer inventory and opportunities to
carry out a maintenance action to the production facility are random.
r 2007 Elsevier B.V. All rights reserved.
Keywords: Preventive maintenance; Imperfect production; Buffer inventory; Opportunistic maintenance; Random production capacity
availability
0925-5273/$ - see front matter r 2007 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2007.02.037
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R.I. Zequeira et al. / Int. J. Production Economics 111 (2008) 686696 687
maintenance actions is building a buffer inventory after the last preventive maintenance action for
to satisfy the demand during the production using the extra production capacity the rst (ran-
unavailability period. Nevertheless, inventory nan- dom) time it is available, and the optimal size S of
cing often incurs considerable opportunity costs. the buffer inventory.
Holding products in inventory also implies costs Note that the expected holding costs increase
due to allocation space, equipment required to when T decreases and, if the maintenance action is
support and move it and deterioration. Hence, made after the buffer inventory is built, as we
keeping minimum inventory levels is of practical assume in this paper, the expected number of
interest. Besides, it has been shown that process defective items increases when T increases. Simi-
reliability can be improved keeping low inventory larly, the expected shortage increases when S
levels together with increasing the skill levels of decreases and the expected holding costs increase
workers (Alles et al., 2000). Keeping low inventories when S increases. Therefore, the optimal determina-
is encouraged by modern management approaches tion of the values of T and S has a signicant
like just-in-time (Hopp and Spearman, 2000). practical interest.
Investment in capacity expansion remains one of
the most critical decisions for manufacturing 1.1. Literature review
organizations (Chou et al., 2007; Julka et al.,
2007). Because of high utilization of installed The analysis of breakdowns in production sys-
production capacities it can be expected that the tems has received attention in the past. Groenevelt
extra production capacity to build the buffer et al. (1992) study economic lot sizing decisions
inventory is available only at random times. considering the effects of machine breakdowns
Furthermore, it can be assumed that once it is and corrective maintenance. Analytical models of
available it can be used to produce the whole buffer. preventive maintenance and safety stock strategies
One example is when the extra production capacity are presented by Cheung and Hausman (1997)
is a facility that produces different kinds of items and Dohi et al. (2001) considering a production
under a non-preemptive policy. If the inter-arrival environment subject to random machine break-
times and quantities to be produced are random downs.
then the times at which this extra production Models with a practical appeal to study imperfect
capacity is available are random (Anupindi and production process have been proposed. Porteus
Tayur, 1998). Non-preemptive scheduling policies (1986) assumed the production process to be
are usual in manufacturing environments (Nahmias, perfectly functioning at the beginning of a lot.
2004). Production may shift to an out-of-control state each
In practice, unexpected production demand or time a unit is produced. Once the process is in the
spare parts shortage can cause the rescheduling of out-of-control state all items produced are defective.
the times of planned preventive maintenance. In Rosenblatt and Lee (1986) assumed that the
these cases a natural assumption is to consider that production system is functioning perfectly at the
periods between opportunities for the maintenance beginning of a lot and that the process may shift out
action to the production facility are random. of control at some random time and begin to
Motivated by the previous random characteristics produce a proportion q of defective items.
that are relevant to the management of production Models considering preventive maintenance of
facilities, we study in this paper a production system systems with buffers have been developed. van der
that can shift out of control and begin to produce a Duyn Schouten and Vanneste (1995) examined
proportion of defective items. Preventive mainte- maintenance optimization for production systems
nance actions to restore the production facility to a considering buffer capacity. In their model the
good-as-new condition have random durations and decision to start a preventive maintenance action
are opportunistic, to decrease overall costs. Besides, depends on the buffer level and on the condition of
preventive maintenance actions provoke the un- the installation. Meller and Kim (1996) studied a
availability of the production facility. To satisfy the two-machine system with a xed capacity buffer
demand during the unavailability period of the between the machines. Their model can be used to
manufacturing facility a buffer is built in advance determine the optimal buffer inventory that triggers
when extra production capacity is available. We are preventive maintenance on the rst production
interested in nding the optimal time threshold T machine. Perry and Posner (2000) studied a single
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688 R.I. Zequeira et al. / Int. J. Production Economics 111 (2008) 686696
maintenance actions incurs costs. Besides, using the The cost due to defective items dy; w, condi-
remaining buffer delays the resumption of the tioned on Y and W, is
normal production, with the consequent production Z TyS=aw
cost reduction. dy; w dqb F x dx.
0
2.1. Maintenance policy Hence the expected cost due to defective items is
Z 1 Z 1 Z TyS=aw
The policy we will consider is the following. Let y DT; S dqb ZuF x
0 0 0
be the rst time after the threshold time T, measured
euyZw dx dy dw.
from T, at which the extra production capacity is
available. After a production resumption a buffer The length of the cycle conditioned on Y, W and
inventory of size S begins to be built at time T y. Z, ly; w; z, is obtained as
Once the buffer inventory is built the maintenance 8
>
> S S S
action to the normal production facility begins at >T y w
< if zp ;
a b b
the rst opportunity for maintenance, at time ly; w; z
>
> S S
T y S=a w. See Fig. 1 where a realization of : T y a w z if z4 b :
>
the buffer inventory level as a function of time is
presented. We look for the values of T and S for Hence the expected length of the cycle is
which the cost rate is minimum. Z 1
1 1 S S
LT; S T Gz dz. (1)
u Z a b S=b
2.2. Cost rate function
The expected cost in a cycle is given by the sum of
When normal production and consumption rates the expected cost due to defective items, the
are equal and deliveries are made in small lots inventory holding cost, the expected shortage cost
(assumption 10) normal production inventory hold- and the preventive maintenance cost.
ing costs are kept at low levels. Therefore, we will Z 1 Z 1 Z TyS=aw
not consider those costs in the analysis but the CT; S dqb uZ
buffer inventory holding cost. Note that deliveries 0 0 0
uyZw
in small lots are encouraged by the just-in-time e F x dx dy dw
approach. S S2 S2
The expected buffer inventory holding cost in a h
2a 2b Z
cycle and the expected shortage cost in a cycle are Z 1
given by the following equations: rb Gz dz C m .
S=b
2
S S2 S
HT; S h , We look for the values of T and S for which the
2a 2b Z cost rate
Z 1 CT; S
CRT; S
BS rb Gz dz. LT; S
S=b
attains its minimum value, where LT; S is given by
Eq. (1).
It is natural to consider times to shift to imperfect
Extra production
S capacity availability production with increasing failure rates for produc-
tion facilities that deteriorate with the time of
operation. Nevertheless, in some cases it can be
assumed that the shift to imperfect production is
provoked by external actions (shocks), for example,
T y S/ w S/ time erroneous operator actions or abnormal environ-
z z mental conditions that can be assumed to have a
Preventive
Maintenance
Preventive constant arrival rate. That is, in these cases the
Maintenance
exponential distribution is a good model for the
Fig. 1. Realization of inventory level as a function of time. time to shift to imperfect production. Even when the
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R.I. Zequeira et al. / Int. J. Production Economics 111 (2008) 686696 691
The necessary condition to obtain the optimal It seems difcult to prove the convexity of the
value of S is given by cost rate function with respect to S. Nevertheless, it
U S S 0, (2) can be seen that under some conditions there exists,
for a value of T given and the other parameters
where xed, a unique value of S for which the cost rate
q q function attains its global minimum. Note that if the
U S S CT; S LT; S CT; S LT; S following condition holds
qS qS
q2 q2
is given by the following equation: CT; S LT; S CT; S LT; S40
( qS 2 qS 2
S S 1 (3)
U S S DS T; S h LT; S
a b Z
then U S S is strictly increasing and if there is, for T
)
S S 1 1 1 S xed, a positive value S of S for which U S S 0,
S G then the cost rate attains its global value at S for
2a 2b Z a b b
( the value of T given. Otherwise, if condition (3)
S 1 1 S S holds and for all S40 it holds that U S S40, then
r G T
b u Z a b the cost rate attains its global minimum value at
Z 1 ) S 0, for the given value of T. It is obtained that
b q2 q2
1 Gz dz CT; S LT; S CT; S 2 LT; S
a S=b 2
qS " qS
1 1 S Z 1Z 1
Cm G , Zwuy b S
a b b dq Zue f T y w
0 0 a2 a
where Z TyS=aw #
1 S
DS T; S LT; S g F x dx dy dw
Z Z b b 0
1 1
dqb ZueZwuy 1 1
0 0 h LT; S
( a b
1 S
F T y w LT; S 1 S2 S2 S S
a a 2 g
Z TySw ) b 2a 2b Z b
1 1 S a
1 S 1 1 S S
G F x dx dy dw. r g T
a b b 0 b b u Z a b
If the time to shift to an out-of-control state is 1 S
Cm 2 g . 4
exponential with mean l1 then DS T; S is given by b b
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692 R.I. Zequeira et al. / Int. J. Production Economics 111 (2008) 686696
i.e. if the expected costs due to imperfect production time equal to 14 days between occurrences of
are greater than zero and if there exists, for S and opportunities to begin building the buffer inventory,
the other parameters xed, a positive value T of T and to opportunities for the maintenance action
for which condition (7) holds, then the cost rate occurring each 2 days, in average. We will consider
function CRT; S attains its global minimum at T . an exponential time to shift to an out-of-control
Otherwise if condition (8) holds and for all T40 it state with failure rate l 1 year1 .
holds that U T T40 then the optimal value of T is We will consider that the duration of the
0. Note that under the assumptions of our model if maintenance action has an exponential distribu-
there is no imperfect production then it is mean- tion. Although other distributions like the Lognor-
ingless to set a nite value for T and the optimal mal are suitable to model time to repair since
value for T is T 1, i.e. not to carry out they do not have the memoryless property, the
maintenance actions. exponential distribution is more tractable analyti-
Hence if conditions (3) and (8) hold then the cally and in a number of situations it is a good
optimal values of T and S can be obtained using the model for the time to repair since it gives greater
following algorithm: probability to short durations of the maintenance
action.
1. Set an initial value S 1 of S. Fig. 2 presents the cost rate CRT; S as a
2. Repeat until no changes in S j and T j occur, function of S and T for values of S between 0 and
j 1; 2; . . . . 379 units and for T between 4 and 82 days. Values 0
2.1. Set S Sj . Let T j be the value of T for which and 379 units for buffer inventory level S corre-
Eq. (7) holds. If T j o0 then set T j 0. spond to a probability of 1 and 0.01, respectively, of
2.2 Set T T j . Let Sj be the value of S for which shortage in a cycle. Values 4 and 81 days for T
Eq. (2) holds. If S j o0 then set S j 0. correspond to a probability of 0.01 and 0.20,
respectively, that before time T the production
In practice, we can set an interval for T and an shifts to imperfect production. Note from Fig. 2
interval for S considering reasonable values for that a global minimum exists for the cost rate
the probability of imperfect production and the function CT; S for the interval considered for T
shortage probability. Let pT and be pS be values and S. Besides, for this data set the cost rate
of the probability of imperfect production before function CRT; S is rather sensitive to both T
T and the shortage probability in a cycle, respec- and S.
tively. An interval for T inside which the optimal To look for the optimal values analytically we set
value of T can be expected to be is 0; T max , pT 0:9999 and pS 0:0001. In correspondence
where T max is the value of T for which pT is close to with these probabilities, the intervals we set for the
one. Similarly, an interval for S inside which the search are [0 year, 9.2 year] and [0 units, 758 units]
optimal value of S can be expected to be is 0; Smax , for T and S, respectively. For the data set and
where S max is the value of S for which pS is close to the intervals for T and S we are considering it can
zero. be checked that condition (6) holds. Hence there is,
Note that for T and S given the costs due to for each value of T, a unique value of S for which
holding inventory and to defective production the cost rate attains its global minimum. Besides,
increase when the buffer replenishment rate a since the expected costs due to imperfect production
decreases. In the Numerical example section are greater than zero, then condition (8) holds.
we study the dependence of the optimal T on S Therefore, there is, for each value of S, a unique
for different values of the buffer replenishment value of T for which the cost rate attains its
rate a. global minimum. The optimal values of T and S
are found to be 0.072 year, that is 26.3 days, and 98
3. Numerical example units, respectively. The minimum cost rate is
$3443.9/year.
Consider the following data: a 15 000 units per If the buffer inventory is not built, i.e. if S 0,
year, b 30 000 units per year, u1 14 days, then the optimal value of T is 0.089 years, which
Z1 2 days, EZ 1 day, q 0:1, d $10 per unit, corresponds to 32.5 days. This leads to a cost rate of
C m $150, h $25 per unit per year and r $1 $3723.2/year, which represents an increase of 8.1%
per unit. Note that these data correspond to a mean in relation to the minimum attainable cost rate
ARTICLE IN PRESS
694 R.I. Zequeira et al. / Int. J. Production Economics 111 (2008) 686696
5500
4500
4000
3500
3000
100
80 400
60 300
T( 40
da 200
ys) 20 100
its)
0 0 S (un
80
70
60
Optimal T (days)
50
40
30
20
10
0 100 200 300 400 500 600 700 800
S (units)
Fig. 3. Optimal value of T as a function of S for a 3000 units per year (dotted line), a 6000 units per year (dashed line) and a 15 000
units per year (solid line).
when S and T are set at optimal values. If we The optimal value of T as a function of S for a
set T 0 then we obtain that the optimal 3000 units per year (dotted line), a 6000 units per
buffer inventory is S 147 for which the cost year (dashed line) and a 15 000 units per year (solid
rate is $4646.4/year. This corresponds to an in- line) is represented in Fig. 3. Note that for values
crease of 34.9% of the cost rate in comparison relatively small of S we have that the optimal T
with the attainable minimal cost rate if both increases when a increases. This can be explained in
decision variables T and S are set to the optimal the following way. For small values of S the buffer
values. inventory holding cost in a cycle is relatively small.
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R.I. Zequeira et al. / Int. J. Production Economics 111 (2008) 686696 695
12000
11000
10000
Minimum cost rate ($/year)
9000
8000
7000
6000
5000
4000
3000
0 100 200 300 400 500 600 700 800
S (units)
Fig. 4. Minimum cost rate as a function of S for a 3000 units per year (dotted line), a 6000 units per year (dashed line) and a 15 000
units per year (solid line).
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