Article ID: | iaor2000756 |
Country: | United Kingdom |
Volume: | 26 |
Issue: | 1 |
Start Page Number: | 73 |
End Page Number: | 91 |
Publication Date: | Jan 1999 |
Journal: | Computers and Operations Research |
Authors: | Cao Jinhua, Liu Bin |
Keywords: | inventory |
This paper deals with a production–inventory system which consists of an unreliable machine and a storage. A two-critical-number policy is used to control a machine's setups or shutdowns. Apart from the intentional shutdowns, the machine is subjected to random failures which must be repaired to make it operational again. The demand process for a product is a compound Poisson process. We assume that the demand-size distributions are arbitrary and unsatisfied demand is backlogged rather than lost. We first present a reasonable condition to ensure the existence of the steady-state distribution of the inventory process, and then derive an expression of steady-state distribution. Based on it, we further obtain a cost expression for a special case of the exponentially distributed demand sizes. Finally, the numerical results reveal some relations between the optimal policy parameters and the system's parameters.