Optimal hedging point control for a failure-prone manufacturing system

Optimal hedging point control for a failure-prone manufacturing system

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Article ID: iaor20023546
Country: United States
Volume: 32
Issue: 6
Start Page Number: 681
End Page Number: 688
Publication Date: Jun 2001
Journal: International Journal of Systems Science
Authors: ,
Keywords: management
Abstract:

This paper considers a manufacturing system with multiple operational modes producing one part type. The part processing time at each operational mode is exponentially distributed and its rate is controllable. The demand arrival is random and described by a Poisson process. By minimizing an infinite-horizon discounted expected cost function, the optimal service rate control is derived. It is proved that the optimal policy is of a hedging point structure by examining the properties of the optimal cost function such as convexity, monotonicity and asymptotic behaviours. The hedging points at different operational modes can be ordered according to their production capacities. The relationships of the hedging points with some system parameters are presented. These structural properties of the optimal control policy are helpful in finding simple and realistic suboptimal policies for practical manufacturing systems. A numerical example is given to demonstrate our results.

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