Joint Optimization of Capacity Expansion, Production and Maintenance in Stochastic Manufacturing Systems

This paper presents an analytical model for the joint determination of optimal production, corrective maintenance and capacity expansion policies for a repairable production system subject to random failures. The production system have to make decisions regarding production and maintenance, as well as investment in capacity expansion in order to minimize costs of investment, production, maintenance, inventories and backlogs in an uncertain environment. The introduction of corrective maintenance strategy in the proposed model improves the availability of the machines and hence reduces the total incurred cost compared to available models. The control variables are the random stopping times at which to purchase a new capacity, the production and corrective maintenance rates before and after capacity purchase. The objective is Corresponding author. e-mail: [email protected] 196 F.I. Dehayem N. et al. to minimize production, capacity investment, inventories, backlogs and maintenance costs over an infinite planning horizon. Optimality conditions are given and numerical methods are used to solve them and to determine the control policy. A Numerical example and sensitive analyses are presented to illustrate the usefulness of the proposed approach.