Integrated load distribution and production planning in series-parallel multi-state systems with failure rate depending on load

A production system containing a set of machines (also called components) arranged according to a series-parallel configuration is addressed. A set of products must be produced in lots on this production system during a specified finite planning horizon. This paper presents a method for integrating load distribution decisions, and tactical production planning considering the costs of capacity change and the costs of unused capacity. The objective is to minimize the sum of capacity change costs, unused capacity costs, setup costs, holding costs, backorder costs, and production costs. The main constraints consist in satisfying the demand for all products over the entire horizon, and in not exceeding available repair resource. The production series-parallel system is modeled as a multi-state system with binary-state components. The proposed model takes into account the dependence of machines' failure rates on their load. Universal generating function technique can be used in the optimization algorithm for evaluating the expected system production rate in each period. We show how the formulated problem can be solved by comparing the results of several multi-product lot-sizing problems with capacity associated costs. The importance of integrating load distribution decisions and production planning is illustrated through numerical examples.