An extended optimal lot sizing model with an unreliable machine

Abstract

This paper presents an extended EMQ model which determines an optimal manufacturing lot size for an unreliable machine. An average cost function is derived when the machine has an arbitrarily distributed time between failures and constant time to repair. Under the assumption that time between failures is exponentially distributed, the optimal lot size is determined and some properties of the proposed model are derived. Through numerical experiments, sensitivity analyses are carried out to examine the effects of machine parameters as well as cost parameters on the optimal lot size. It is observed that the optimal lot size does not always increase as the failure rate or the time to repair increases.