A Markov Model to Determine Optimal Equipment Adjustment in Multi-stage Production Systems Considering Variable Cost

Our aim is to maximize expected profit per item of a multi-stage production system by determining best adjustment points of the equipments used based on technical product specifications defined by designer. In this system, the quality characteristics of items produced should be within lower and higher tolerance limits. When a quality characteristic of an item either falls beneath the lower limit or lies above the upper limit, it is reworked or classified as scrap, each with its own cost. A function of the expected profit per item is first presented based on equipment adjustment points. Then, the problem is modeled by a Markovian approach. Finally, numerical examples are solved in order to illustrate the proposed model.