A multi-item manufacturing system with an outsourcer and random defective items

Abstract

This study examines a multi-item manufacturing problem with a single machine, an outsourcer, and random defective items. To cope with the increasing multi-product demands from global markets, modern manufacturing firms must make an efficient production plan to satisfy customer’s needs with quality goods and smooth the in-house fabrication schedule and utilization. Outsourcing is an effective option to avoid machine overloads and smooth fabrication schedules. Further, the fabrication of random defective products is inevitable because of unanticipated factors in real manufacturing environments. These products must be identified, separated and discarded to retain the desired quality of the finished lot. To address the above-mentioned concerns, this study develops a mathematical model to represent a hybrid stock refilling system, employs mathematical derivations to find long-run average system expenses, and uses an optimization technique to derive a closed-form common rotation time for this hybrid system. The results of this study show the individual and combined impacts of variations in outsourcing percentages and scrap rates on optimal rotation time and diverse core system parameters (such as machine utilization, specific cost component, etc.) to facilitate planning, controlling, and decision making in such a particular hybrid fabrication system.