Optimal Control of a Production Process Subject to Random Deterioration

• Published in: Operations research Vol. 38; no. 6; pp. 1116 - 1122
• Main Authors: Schneider, Helmut, Tang, Kwei, O'Cinneide, Colm
• Format: Journal Article
• Language: English
• Published: Linthicum, MD INFORMS 01.11.1990; Operations Research Society of America; Institute for Operations Research and the Management Sciences
• Subjects: Applied sciences; Approximation; Capital costs; Cost efficiency; Economic models; Exact sciences and technology; failure models: inspection of production process; Mathematical models; multichannel: optimization of process adjustment model; Operational research and scientific management; Operational research. Management science; Operations research; Optimal control; Optimal policy; Optimal solutions; Optimization; Process control; Process controls; Production costs; Production engineering; Production planning; quality control: process control; queues; Queuing; Random variables; reliability; Reliability theory. Replacement problems; Cost minimization; Experimental result; Approximation; Deterioration; Quality control; Optimal policy; Inventory control; Production process; Decision rule
• ISSN: 0030-364X; 1526-5463
• DOI: 10.1287/opre.38.6.1116

A production process exhibits a decreasing pattern in the process mean in the course of production. We address the decision problem of selecting the starting level of the process mean and the level at which the process mean should be adjusted back to the starting level. The costs to be minimized are the long-run average cost of production, adjustment and loss for defective items. In addition to the optimal solution, simple approximate solutions are developed and shown to be more cost effective than a simple linear policy often applied to this problem.