Production and inventory rationing in an unreliable Make-to-Stock System under preventive maintenance policy

This paper proposes a joint optimization approach for the production decision-making and inventory allocation in a fault-prone machine Make-to-Stock System, considering both production-side uncertainties and demand-side uncertainties, these factors often cause operational inefficiencies, higher costs and lower customer satisfaction, thus highlighting the need to integrate maintenance strategies into production-inventory management. A model based on Markov decision theory is presented to more accurately reflect real-world production processes, utilizing a preventive repair maintenance strategy, which focuses on repairing the machine only when it fails, as opposed to traditional fixed-cycle or fixed-threshold maintenance strategies. To tackle the complex structure of the optimal control strategy, the paper employs a numerical algorithm for updating the optimal strategy. Computational experiments are conducted to explain the properties of the optimal control strategies and emphasize the importance of considering a maintenance factor in the system. The study highlights the significance of effective production inventory system management, with the conclusion that the optimal control strategy is a machine-state-dependent threshold strategy.