PRODUCTION-INVENTORY MODELS WITH AN UNRELIABLE FACILITY OPERATING IN A TWO-STATE RANDOM ENVIRONMENT

Abstract

We consider two model variants of a production-inventory system. The system is characterized by a producing machine which is susceptible to failure following which it must be repaired to make it operative again. The machine's production can also be stopped deliberately because of stocking capacity limitations. During ON periods the input into the buffer is continuous and uniform (until a threshold is reached), whereas during OFF periods the output from the buffer is a compound Poisson process. We are interested in computing the equilibrium content level process under the assumption that full backlogging is allowed. In the first model, variant OFF periods are independent of the demand process, and in the second variant, they are determined and controlled in accordance with a certain level crossing stopping rule.