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3
Int. J. Production Economics ] (]]]]) ]]]]]]
www.elsevier.com/locate/dsw
5

7
Analysis of a production/inventory system with randomly
9
failing production unit subjected to a minimum required
11 availability level

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Anis Chelbia,, Nidhal Rezgb
13

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15 a
Centre de Recherche en Productique (CEREP), Ecole Superieure des Sciences et Techniques de Tunis, 5 Av. Taha Hussein-Tunis,

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Tunisia
b
17 MACSI-INRIA Loraine, LGIPM, Universite de Metz, Ile de Saulcy-57045 Metz Cedex 01, France

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19

21 Abstract
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23 In this paper, we consider a repairable production unit subject to random failures, which supplies input to a
subsequent assembly line. The production unit is submitted to a maintenance action as soon as it reaches a certain age
TE

25 T or at failure whichever occurs rst. A buffer stock h is built up in order to guarantee a continuous supply of the
assembly line at a constant rate during repair and preventive maintenance actions whose respective durations are
27 random. This production unit operating strategy is investigated taking into account a minimum required stationary
availability level A. We nd the optimal operating characteristics (h* and T*) which minimize the total average cost
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per time unit and satisfy the availability constraint.


29 r 2005 Elsevier B.V. All rights reserved.

31 Keywords: Preventive maintenance; Reliability; Availability; Inventory; Buffer stock; Optimization


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33
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35 1. Introduction
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37 Random failure of production units (machines or parts) is one of the major disruptions to which
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production systems are often submitted. Such a disruption lower the systems effective capacity and may
39 cause high operating costs particularly in the context of Just-in-Time manufacturing. A number of studies
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deal with the issue of performance evaluation of production systems subjected to random failure (Buzacott
41 and Shanthikumar, 1993; Dallery and Gershwin, 1992; Xie, 1993. In presence of unreliable systems, many
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maintenance strategies have been proposed in the literature. A survey of preventive maintenance models by
43 Corresponding author. CEREP, 72 Avenue Habib Bourguiba, Le Bardo 2000, Tunisia. Tel.: +216 98 323 590; fax:
+216 71 965 100.
45 E-mail addresses: anis.chelbi@planet.tn (A. Chelbi), nrezg@loria.fr (N. Rezg).

47 0925-5273/$ - see front matter r 2005 Elsevier B.V. All rights reserved.
doi:10.1016/j.ijpe.2004.12.012
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2 A. Chelbi, N. Rezg / Int. J. Production Economics ] (]]]]) ]]]]]]

1 Valdez-Flores and Feldman (1989) covers inspection models, minimal repair models, shocks models and
diverse replacement models like age or block periodic replacement policies. Both of these strategies have
3 been proposed by Barlow and Hunter (1960). The block replacement policy (BRP) suggests to replace a
given equipment by a new identical one at failure and at each kT time units (k 1, 2, y) regardless of the
5 age; whereas the age replacement policy (ARP) suggests to perform a replacement as soon as the equipment
reaches a certain age T or at failure whichever occurs rst. A common characteristic of the great majority
7 of maintenance models is that they consider equipment (machines) that operate independently of the other
equipment (machines) in the production systems and are in continuous operation.
9 Hence, the simultaneous consideration of maintenance policies and production planning and control has
recently become an important research area. Some studies have examined the conditions of building buffer
11 stocks to guarantee the continuous supply of the subsequent production unit during the interruptions of
service due to repair or preventive maintenance. Van der Duyn Schouen and Vanneste (1995) proposed for

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13 two machines and one buffer between them, a preventive maintenance policy based not only on the age of

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the machine but also on the size of the buffer which are both used to determine when to perform a
15 preventive maintenance action. Meller and Kim (1996) studied the impact of a preventive maintenance

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policy on a two-machine system with xed-capacity buffer between machines. They suppose in their model
17 that the machines failure rates are constant and that repair time is exponentially distributed and preventive
maintenance actions have known and constant duration.

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19 Other related works appearing in the literature include Cheung and Hausmann (1997), and Groenvelt et
al. (1992a, b).
21 More recently, Chelbi and Ait-Kadi (2003) developed an analytical model to determine both the buffer
stock size and the preventive maintenance period for an unreliable production unit which is submitted to
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23 regular preventive maintenance of random duration.
All the mentioned papers consider the cost as the performance criterion of the proposed policies. In this
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25 work, we propose a production unit operating strategy which also considers the total average cost per time
unit as the objective function but we take into account a minimum required stationary availability level for
27 the production unit.
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We propose a joint optimal buffer inventory and age based preventive maintenance strategy for a
29 randomly failing production unit which has to supply an assembly line operating according to a just-in-time
conguration. The production unit is submitted to a maintenance action as soon as it reaches a certain age
31 T or at failure whichever occurs rst. According to the proposed strategy, an optimal buffer inventory
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level h must be built up, at the maximum production rate, to hedge against future capacity shortage during
33 repair or planned maintenance actions whose respective durations are random. Once the inventory level
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reaches h one should exactly produce enough to satisfy the demand.


35 The objective of this study is to determine the values of buffer stock h and the age T at which
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preventive maintenance must be performed so as to simultaneously:


37
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39  minimize the total expected cost per time unit, which includes the maintenance cost, the inventory
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holding cost, and the shortage cost.


41  satisfy a minimum required stationary availability level A.
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43
Next section presents the working assumptions as well as the mathematical model corresponding to the
45 joint maintenance and inventory control policy. A numerical procedure is proposed in Section 3, it allows
nding the combination of the decision variables h and T which minimizes the total average cost per time
47 unit and satises the minimum required stationary availability level. A numerical example is presented is
Section 4 and the obtained results are discussed.
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1 2. The mathematical model

3 We consider an unreliable production unit supplying an assembly line operating according to a just-in-
time conguration. The production unit is submitted to a maintenance action as soon as it reaches a certain
5 age T or at failure whichever occurs rst. A buffer stock is built up to guarantee the continuous supply of
the assembly line during repair following failures and during the execution of planned preventive
7 maintenance actions. A minimum stationary availability level is required for the production unit. Our
objective is to determine the age T at which preventive maintenance must be performed, and the size of the
9 buffer stock h so as to operate at minimum cost per time unit and meet simultaneously the availability
requirement.
11 The following assumptions are considered:

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13
1. Lifetime and maintenance duration probability distributions are known.

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2. Failures are detected instantaneously.
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3. Maintenance actions are perfectly performed. Each action restores the equipment to a state as good as

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new.
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4. All costs related to maintenance and inventory are supposed to be known and constant.

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5. The stock is imperishable with time.
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6. All the resources needed to perform the maintenance actions are available at the right time.
21
Throughout the paper, the following notation will be used:
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23
gp (  )
probability density function associated to preventive maintenance duration;
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25 mp average duration of a preventive maintenance action;


f(  ) probability density function associated to the production unit lifetime;
27 F(  ) probability distribution function associated to the production unit lifetime;
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R(  ) production unit reliability function;


29 l(.) production unit failure rate;
m production unit average lifetime;
31 gc (  )
probability density function associated to repair time;
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mc mean time to repair;


33 h buffer stock level;
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T age at which preventive maintenance action must be performed;


35 d demand rate (units/time unit);
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Umax maximum production rate (Umax4d);


37 Mc corrective maintenance action cost;
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Mp preventive maintenance action cost (Mp5Mc);


39 Cs holding cost of a product unit during a unit of time;
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Cp shortage cost of a product unit during a unit of time. This cost is associated with additional effort
41 to provide the assembly line with the unavailable product in the short run;
U

P(h,T) operating total average cost per time unit.


43

45 Other notations will be introduced through the modeling of the strategy.


We consider the proposed policy as a combination of an age based preventive maintenance policy
47 (APMP) without inventory control and an inventory control policy (ICP) without preventive maintenance
actions.
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1 2.1. Age based preventive maintenance policy (APMP)

3 According to this preventive maintenance strategy, during one maintenance cycle there could be either a
preventive action in case the production unit lifetime reaches the age T, or a corrective one in case the
5 production unit fails before T. The incurred total cost of maintenance Ft on a time horizon [0,t] is given
by
7
Ft M c N c t M p N p t; (1)
9 where, Nc(t) is the number of corrective actions carried out in [0,t] and NP(t) is the number of preventive
actions performed during the same time interval. Since failures occur on a random basis, Ft is a random
11 variable. The total average cost per time unit on an innite time horizon, can be written as follows:
 
EFt

F
13 jT lim ; (2)
t!1 t

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15 using relation (1), we get :
 

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EN c t EN p t
17 jT lim M c Mp : (3)
t!1 t t

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19 - inlar, 1975), the explicit form of jT is given by
By applying the renewal theory (C
M c F T M p RT
21 jT R T : (4)
0 Ru du mp RT mc F T
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23 If the production unit failure rate is an increasing monotonous function, there is a nite and unique
optimal strategy T*, which minimizes jT (Barlow and Proschan, 1965). T* veries necessarily the
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25 equation:

djT
27 0: (5)
dT TT 
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29 Eq. (5) is expressed as follows:


ZT
31 f T f T
R

M c  M p  Ru du m M c  mc M p   M c  M p F T  M p 0: (6)
RT RT p
33 0
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The production unit failure rate is expressed by


35
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f T
lT : (7)
37 RT
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As a result, T* is solution of the following equation:


39
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ZT
mp M c  mc M p Mp
41 lT Ru du lT  F T : (8)
Mc  Mp Mc  Mp
U

0
43 In the general case, numerical procedures must be used to solve Eq. (8). In the case of an increasing
failure rate, the behavior of the function jT is similar to the one given by Fig. 1.
45
Z1
47 m Ru du: (9)
0
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A. Chelbi, N. Rezg / Int. J. Production Economics ] (]]]]) ]]]]]] 5

1 2.2. Inventory control policy (ICP)

3 The inventory control policy suggests to produce at the maximum rate Umax to build a buffer stock h
(Fig. 2, phase I), then produce at the demand rate (phase II). When production is stopped due to repair the
5 demand is satised from the buffer stock whose level decreases with a slope equal to d (phase III).
The mathematical model corresponding to this strategy is based on the two following assumptions:
7
a. The shortage and holding costs Cp and Cs are known and constant (CpbCs).
9 b. Failures are excluded during phase I (see Fig. 2), phase of reconstitution of the buffer stock h.

11 For a production cycle period Tk, two cases may be envisaged. The rst case (Fig. 3) characterizes a cycle
without loss (shortage), in which the time Dk of service interruption of the production unit does not exceed

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13 the period of full consumption of the buffer stock h/d (Dkph/d). The second case (Fig. 4) represents a

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production cycle with loss (Dk4h/d).
15

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17 (T)

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19
MC/( +C)
21
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23
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T* T
25
Fig. 1. Optimal policy at T T*.
27
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29 Stock Phase I Phase II Phase III


h

31
R

0
33
R

Wk Dk loss
Time

Tk
35
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37 Fig. 2. Evolution of the buffer stock level.


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39 Stock
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S X Y
h
-d
41
U

Umax - d
h d.D k
T Z
43 R

Dk Wk Time
45
Tk
47
Fig. 3. Production cycle without loss.
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1 Stock
Q X Y
h
3 -d
Umax - d
5
P R T Z
loss
7 Dk Wk Time
S Tk
9
Fig. 4. Production cycle with loss.
11

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13
In the case of production cycle without loss (Dkph/d), the average cost GNL(h) of inventory control is

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15 given by

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17 dU max D2k
GNL h C s hDk W k  : (10)
2U max  d

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19
We can also write
21
C s dU max D2k
GNL h Dk W k C s h  ; (11)
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23 2U max  d

where Wk stands for the period during which the production unit is operating within a production cycle
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25 period Tk.
For production cycle with loss (Dk4h/d), the average cost GWL(h) of inventory control is calculated by
27 adding the holding cost (AsCs) to the loss cost (NpCp), where AS corresponds to the sum of the two surfaces
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delimited by PQR and TXYZ and Np corresponds to the number of product units lost. Thus, the expression
29 of GWL(h) is as follows:
31     
h2 h2 h h
R

GWL h C s h Wk  C p d Dk  : (12)
2d 2U max  d U max  d d
33
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After simplication, we can write


35
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C s U max  2d 2
GWL h h C s W k  C p h C p d:Dk : (13)
37 2dU max  d
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39 Hence, the total expected cost Gh of inventory control is given by


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Gh GNL h1  Rc h=d GWL hRc h=d; (14)


41
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with
43
  Z1
h
45 Rc gc u du: (15)
d
h=d
47
Finally, the average total cost per time unit dc h is given by
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2   3
1 2 U max  2d h
C
6 s E W k h C s h Rc 7
1 6 2dU max  d d 7
3 dc h 6        7; (16)
ET k 6
4C
h=d
R x 2
dU max h h h 7
5
s xh  gc x dx C p dE Dk  ; Dk i Rc
5 0 2U max  d d d d

where
7
     Z1  
h h h h
9 E Dk  ; DK i Rc x g x dx; (17)
d d d d c
h=d
11
Z1

F
13 E W k  uf u du; (18)

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0
15
Eq. (15) denotes the probability to be in a production cycle with loss.

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17 Considering, in addition, the corrective maintenance action cost Mc, the total average cost per time unit
can be expressed as follows:

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19 2   3
2 U max  2d h
6 C s E W k h C s h 2dU Rc 7
1 6 max  d d 7
21 Ph; 1 6         7 Mc ;
6
ET k 4 h=d
R 2
x dU max h h h 7
Cs xh  gc x dx C p dE Dk  ; Dk  Rc 5 ET k
D
23 0 2U max  d d d d
(19)
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25
Ph; / stands for the total average cost per time unit incurred when only corrective maintenance is
27 performed (i.e : T /; T being the age at which preventive maintenance could be performed if we adopt an
age based preventive maintenance policy as described in Section 2.1).
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29 The function Ph; / is a positive continuous function, it takes the value of (Cp.d.E(Dk)+Mc)/E(Tk) when
the stock level h is equal to zero (each produced product is consumed immediately by the demand), and it
31 tends towards innity when h tends to innity.
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If we consider the maximum production rate Umax 2d then Eq. (19) can be simplied as follows:
33 2 3
C s E W k h
R

1 6       Mc
35 Ph; 1 4
h=d
R h h h 7 5 : (20)
ET k C s xh  dx2 gc x dx C p dE Dk  ; Dk i Rc ET k
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0 d d d
37
The buffer stock level h* which minimizes Ph; /; veries necessarily the equation:
C


39 dPh; 1
N

 0: (21)
dh hh
41
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which, in the case of Umax 2d, is equivalent to


2 3
43 Z1  
dPh; 1 1 6 h 7
4E W k  E Dk :C s  C s h xgc x dx  C p :Rc 5; (22)
45 dh ET k d
h=d
*
47 h can be obtained by putting Eq. (22) equal to zero and solve for h. It can easily be shown that the second
derivative is positive for any h indicating that the cost function is convex in h.
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1 (h ,)

5
CP dE(Dk)+Mc/E(Tk)
7

9 h* Stock level
*
Fig. 5. Optimal control policy at h h for Umax 2d.
11

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13

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The shape of the curve of Ph; / is given by Fig. 5.
15

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2.3. Combination of both preventive maintenance and inventory control strategies
17

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The strategy proposed in this paper is a combination of both strategies modeled in the two previous
19 sections. Indeed, it combines the rules dictated by the age based preventive maintenance policy (Section 2.1)
with those governing the inventory control strategy (Section 2.2). Let Ph; T be the total expected cost per
21 time unit corresponding to this joint inventory control and maintenance policy. Ph; T will have the
following form:
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23
dc=p h; T M p RT M c F T
Ph; T ; (23)
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25 ET k
where dc=p h; T is identical to Eq. (15) except that the working time period Wk min {Xk, T}, where Xk
27 represents the time to failure, and the interruption time Dk is a mixture of time of preventive maintenance
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and time of corrective maintenance depending on whether Wk T or Wk Xk .


29 2   3
2 U max  2d h
6 C s E W k h C s h 2dU RD 7
31 1 6 max  d d 7
6 h=d  7; (24)
R

dc=p h; T 6       
ET k 4 R 2
x dU max h h h 75
33 Cs xh  g x dx C p dE Dk  ; Dk i RD
2U max  d D d d d
R

35 with
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gD x F Tgc x RTgp x; (25)


37
C

Z T
39 EW k Rx dx; (26)
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0
41
U

EDk F Tmc RTmp ; (27)


43
ET k EW k EDk ; (28)
45      Z1  
h h h h
E Dk  ; DK i RD x g x dx; (29)
47 d d d d D
h=d
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A. Chelbi, N. Rezg / Int. J. Production Economics ] (]]]]) ]]]]]] 9

1   Z1
h
RD gD u du; (30)
3 d
h=d

5 Thus, by replacing in Eq. (23) all the terms by their corresponding expression, the total average cost per
time unit can be expressed as follows:
7 2 3
Z1
6 C s E W k h C s h2 U  2d
gD x dx 7
max
9 6 7
6 2dU max  d 7
6 h=d 7
11 6   7
1 6 6 h=d 7
Ph; T R x2 dU max 7: (31)
6 7

F
ET k 6 C s xh 
2U  d
gD x dx 7
13 6 0 max 7
6 7

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6 R
1  7
15 4 Cp xd  hgD xdx M p RT M c F T 5
h=d

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17
One can notice that the cost Ph; T has a quadratic form in h. It is also interesting to see that putting T

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19 equal to innity in Eq. (31) (i.e. doing only corrective maintenance), we nd exactly the expression Ph; /
(Eq. (19)).
21 For the particular case where Umax 2d, Eq. (31) can be written as follows:
2 3
D
h=d
R
23 C EW h C xh  dX 2
g x dx
6 s k s D 7
1 6 0 7
TE

Ph; T 6 7: (32)
25 ET k 6 R
1  7
4C xd  hgD x dx M p RT M c F T 5
p
h=d
27
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29 This cost function is convex in h. In fact it has a similar form to Eq. (20) integrating, in addition, the cost
related to preventive maintenance.
31 According to the proposed policy in this paper, the total average cost per time unit must be minimized
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under the constraint of a minimum required stationary availability level A.


33 The stationary availability of the production unit submitted to an age based preventive maintenance
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policy is given by (Ait-Kadi and Chelbi, 2000):


35 RT
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0 Ru du
SAT R T : (33)
37 Ru du mp RT mc F T
C

39 It has been proven (Ait-Kadi and Chelbi, 2000) that for systems with increasing failure rates (for which
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preventive maintenance is generally recommended), the stationary availability function is concave in T,


41 which means that it has a unique maximum as shown in Fig. 6:
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Hence, we obtain for a given situation, the following nonlinear optimization problem:
43
Minimize Z Ph; T
45 Subject to SAT  A

47 with h the integer positive and T the real positive.


In the next section, a numerical procedure is developed to solve this problem.
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1 3. Numerical algorithm

3 Taking into account the behaviour of the stationary availability function (Eq. (33)), specially the
concavity in case of equipment with increasing failure rate, the following procedure is proposed. The main
5 idea on which is based this procedure is to nd, for a given minimum required availability level A, the time
interval [T1, T2] for which the availability constraint is satised as shown in Fig. 7. Then, nd the value of T
7 within this interval which will minimize the total average cost per time unit Ph; T as given by Eq. (31).
The following diagram describes the proposed procedure:
9 Notice that this algorithm is valid for a required availability level A such as
SA1oA  SAT  :
11
SA(N) being the availability level under which T2 becomes innite and SA(T*) is the maximum

F
13 availability level that can be reached by the system (see Fig. 6).

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m 1
15 SA1 and SAT 
m mc 1 mc  mp lT 

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17 (see Ait-Kadi and Chelbi, 2000).

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19
4. Numerical example and discussion
21
The following input data were used to illustrate our approach to nd the best strategy:
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23
 Costs (in monetary units): C s 2; C p 250; M c 2000; M p 300:
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25
SA(T)
27
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1/1+(c-p) (T*)
29

31
R

/+c

33
R

T* Age T
35
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Fig. 6. The stationary availability for an age based preventive maintenance policy (case of increasing failure rate).

37
C

39 SA(T)
N

41 XXX
U

A
43

45
T1 T2 Age T
47
Fig. 7. The time interval [T1, T2] for which the availability constraint A is satised.
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1  Demand: d 0:5 unit/time unit.


 Capacity: U max 1 unit/time unit.
3  Production unit time to failure distribution F(  ) : Weibull distribution with shape parameter 2 and scale
parameter 100, leading to an average lifetime m 88; 6 time units. We have an increasing failure rate in
5 this case.
 Repair time distribution gc(  ) : lognormal distribution with mean mc 20 time units and standard
7 deviation sc 2 time units.
 Preventive maintenance duration distribution gp(  ) : lognormal distribution with mean mp 10 time
9 units and standard deviation sp 1:5 time units.
 Minimum required availability level : A 83%:
11

F
Using the procedure described in Fig. 8, we obtain the following results (Table 1).
13 By the light of these results, the strategy which minimizes the total expected cost per time unit while

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satisfying the constraint of a 83% minimum stationary availability, consists in performing preventive
15 maintenance after 97 time units of operation without failure, and form a buffer stock of 1 unit after the

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completion of each preventive maintenance action. By doing so, it would cost 17.72 monetary units/unit of
17 time to operate the production unit according to the proposed policy.

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19
Input data : Cs, Cp, Mc, Mp, d,
Umax, F(.), gc(.), gp(.), A, n
21
D
23 Find T1 and T2 solution of :
SA(T) = A
TE

25
= (T2-T1)/n
Ti = T1 + i (i=1,2,,n)
27
EC

29 Minimize i(h,Ti) solving (h,Ti)/h = 0


i=i+1
Store i(hi*,Ti)
31
R

33 Yes in
R

35
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No
37
C

Chose (h,T) = Min i(hi*,Ti)


i = 1,2,,n
39
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Fig. 8. Numerical algorithm to nd the optimal strategy.


41
U

43
Table 1
The optimal strategy
45
T1 T2 h* T* P(h*,T*)
47
96 108 1 97 17.72
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1 Table 2
Comparative analysis for different inventory related costs (Cp/Cs)
3 Cp/Cs h* T* P(h*,T*) DP Dh DT

5 100 1 97 17.22 0.5 0 0

Basic case 125 1 97 17.72 0 0 0


7 250 3 97 18.85 +1.13 +2 0
350 5 96 19.67 +1.95 +4 1
9

11
Table 3

F
Comparative analysis for different maintenance related costs (Mc/Mp)
13

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Mc/Mp h* T* P(h*,T*) DP Dh DT
15 Basic case 6.67 1 97 17.72 0 0 0

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10 2 96 18.20 +0.48 +1 1
17 15 2 96 18.68 +0.96 +1 1
25 4 96 21.10 +1.95 +4 1

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19

21 Tables 2 and 3 show the results of sensitivity analyses for some parameters when all other parameters are
held constant (with values given in the basic case).
D
23 Table 2 displays the obtained results for different values of the ratio of the shortage cost (Cp) over the
holding cost (Cs). These results indicate mainly that the buffer size h* is sensitive to Cp/Cs. In fact, if we
TE

25 increase the cost ratio with respect to the one of the basic case, the buffer size becomes larger. However, in
case this ratio is reduced (shortage becomes less expensive for example) the values of the decision variables
27 (h* and T*) do not change but the expected total cost per time unit is reduced.
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In Table 3 the ratio of corrective and preventive maintenance actions costs (Mc/Mp) is considered. The
29 obtained results indicate that the buffer size h* becomes larger as the ratio Mc/Mp increases. However, the
optimal age for preventive maintenance which in principle should be reduced remains equal to 96 time
31 units. This is due to the stationary availability constraint which imposes a minimum value of T* equal to 96
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(as shown in Table 1: T 1 96 for the minimum required availability of 83%).


33
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35
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37 5. Conclusion
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39 In this work we proposed a joint buffer inventory and age based preventive maintenance strategy for a
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randomly failing production unit. An analytical model and a numerical procedure have been developed to
41 determine both the buffer stock size and the age at which preventive maintenance must be performed. We
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considered the total average cost per time unit as the performance criterion under a constraint of minimum
43 required stationary availability level of the production unit.
A numerical example has been considered to test the proposed solving algorithm. An optimal solution
45 was generated. Sensitivity analyses of the optimal solution to inventory and maintenance related costs have
been carried out. The obtained results show that the optimal value of the buffer size is generally sensitive to
47 inventory and maintenance costs variation whereas the optimal value of the age for preventive maintenance
is limited by the constraint of the minimum required availability level.
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A. Chelbi, N. Rezg / Int. J. Production Economics ] (]]]]) ]]]]]] 13

1 Investigations are being performed to consider the case of perishable inventory. A complementary
approach based on simulation is also considered to tackle the same problem under a set of different
3 assumptions.

5
6. Uncited references
7
Cornell, 1990; Johnson and Wichern, 1992; Sado and Sado, 1991.
9
References
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