The impact of imperfect processes on production run times

Abstract

This paper investigates the interaction between the economics of production and imperfections in the production process. Specifically, this paper is the first to devise a model in an attempt to provide managers with guidelines to choose the appropriate production run times to buffer against both the production of defective items and stoppages occurring due to machine breakdowns. In addition to providing several structural properties of the model, we show that a manager will always incur a cost penalty when (s)he uses the results of two oft-cited models - the EMQ (Economic Order/Manufacturing Quantity) and the NR-E (No-Resumption, Exponential machine breakdown)-to determine production run times.