Production lot sizing with process deterioration and machine breakdown under inspection schedule

The paper develops integrated production, inventory and maintenance models for a deteriorating production system in which the production facility may not only shift from an ‘in‐control’ state to an ‘out‐of‐control’ state but also may break down at any random point in time during a production run. In case of machine breakdown, production of the interrupted lot is aborted and a new production lot is started when the on‐hand inventory is depleted after corrective repair. The process is inspected during each production run to examine the state of the production process. If it is found in the ‘in‐control’ state then either (a) no action is taken except at the time of last inspection where preventive maintenance is done (inspection policy‐I) or (b) preventive maintenance is performed (inspection policy‐II). If, however, the process is found to be in the ‘out‐of‐control’ state at any inspection then restoration is done. The proposed models are formulated under general shift, breakdown and repair time distributions. As it is, in general, difficult to find the optimal production policy under inspection policy‐I, a suboptimal production policy is derived. Numerical examples are taken to determine numerically the optimal/suboptimal production policies of the proposed models, to examine the sensitivity of important model parameters and to compare the performance of inspection and no inspection policies.