Economic Production Quantity Model with Imperfect Process and Preventive Maintenance for Products Sold with Warranty

Abstract

This paper proposes an integrated economic production quantity (EPQ) model to determine the optimal production run-time and production lot-sizing under a minimal free-repair warranty (FRW) policy It advocates a strategic preventive maintenance (PM) plan for an imperfect production process following a deterioration distribution with an increasing failure rate (IFR) It is assumed that the production system begins in the in-control state that produces items with high or perfect quality Over time the production process may deteriorate to the point to which non-conforming items are fabricated The probability of non-conforming items being produced is thus taken into account to identify the time at which the process is in the out-of-control state Furthermore instead of using an inspection policy which monitors the process a warranty policy for products sold is considered which includes the concept of the inspection cost in order to reduce the inspection time during the process This model can be used for products sold within the warranty period which follows a failure distribution In this case the warranty cost to service non-conforming items is much greater than the cost to service conforming items so the EPQ model controls the proportion of non-conforming items produced through lot sizing resulting in a reduction in the warranty cost In brief minimal repair PM rework and warranty policy are considered in the model An inventory shortage may occur during the PM which is also considered as the shortage cost The objective of this paper is to obtain the optimal production run-length which minimizes the expected total cost per cycle A numerical example is provided to illustrate the effect of changes in the various parameters on the optimal solution A sensitivity analysis and the Taguchi method are applied to the EPQ model with respect to the key parameters

Date of Award	2014 Jul 10
Original language	English
Supervisor	Chinho Lin (Supervisor)