Determining Economic Manufacturing Quantity for an unreliable manufacturing system in discrete time setting

The paper considers an Economic Manufacturing Quantity (EMQ) problem for a failure‐prone manufacturing system in which the production facility may fail at most once during a production cycle. In a discrete time framework, we formulate the model under general‐failure and ‐repair (corrective) time distributions based on the Net Present Value (NPV) approach. As a special case, the model with general failure and constant repair times is considered. The traditional long‐run average cost model is obtained from the NPV model by taking limitation on the discount rate. The criteria for the existence of a local optimal solution are derived for the NPV as well as the long‐run average cost models. With numerical examples, the optimal production policies are determined and sensitivity of some model‐parameters are examined. A comparison of the outcome of the proposed model with the one obtained by time discretisation in the corresponding continuous time model is also made.