## Abstract

We consider the problem of determining production quantities for a single-product production system with random yield and equipment deterioration. Units are processed on a single machine with renewal but no catastrophic failure. At the beginning of each period, we observe the equipment condition and the net inventory level and make two decisions: whether or not to repair the machine and how many units to produce. If we choose to repair, the machine instantaneously returns to good-as-new condition. Items are produced instantaneously and used to fill the demand at the beginning of each period. Unsatisfied demand is backlogged. We assume that the yield (output) follows a binomial distribution, where the probability of generating a good output from one unit of input is a function of the cumulative units produced since last renewal.

Original language | English |
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Pages | 13-17 |

Number of pages | 5 |

State | Published - 2008 |

Event | IIE Annual Conference and Expo 2008 - Vancouver, BC, Canada Duration: May 17 2008 → May 21 2008 |

### Conference

Conference | IIE Annual Conference and Expo 2008 |
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Country/Territory | Canada |

City | Vancouver, BC |

Period | 05/17/08 → 05/21/08 |

## Keywords

- Equipment deterioration
- Lot sizing
- Random yield