Determination of Production and Replacement Strategies through Simulation Modeling

This paper jointly studies the problem of production control, maintenance and replacement of a production system subject to a deterioration process. The production system consists of a production unit that manufactures one type of part. Due to the presence of the deterioration process, the failure rate of the system and the defect rate increase progressively. In particular, when the production unit fails, minimal maintenance is performed, leaving the system at the same level of deterioration before the failure, so that the defect rate and the failure rate remain unchanged with this activity. Whereas with a replacement, the effects of system deterioration are fully restored. The objective of the proposed model is to minimize the total cost incurred. A methodology based on statistical analysis and optimization of a discrete event simulation model is proposed to determine the optimal control parameters of the system. In order to observe the efficiency of the control policy, a sensitivity analysis is presented to illustrate the effect of varying various system parameters on the control policy.