Title: An unreliable production system with fluctuating production and demand rates

Authors: Esmail Mohebbi

Addresses: Department of Management/MIS, College of Business, University of West Florida, Pensacola, FL 32514, USA

Abstract: This paper contains an analytical formulation for performance measurement of an unreliable production-storage operation where production and demand rates for a single item are subject to random fluctuations in the operating environment. These fluctuations are represented as transitions among the states of a continuous-time Markov chain and the demand process is characterised as a compound Poisson process. Assuming that the storage space is limited and the stockouts are lost, the proposed model yields exact expressions for a number of popular performance measures. The model is accompanied by some numerical results.

Keywords: inventories; production systems; limited capacity; random environments; Markov modulated processes; level crossings; fluctuating rates; production rates; demand rates; management science; random fluctuations; operating environments; continuous-time Markov chains; compound Poisson processes; storage space; stockouts.

DOI: 10.1504/IJAMS.2010.029795

International Journal of Applied Management Science, 2010 Vol.2 No.1, pp.20 - 35

Available online: 02 Dec 2009 *

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