Joint optimization of condition-based maintenance and production lot-sizing

Due to the development of sensor technologies nowadays, condition-based maintenance (CBM) programs can be established and optimized based on the data collected through condition monitoring. The CBM activities can significantly increase the uptime of a machine. However, they should be conducted in a coordinated way with the production plan to reduce the interruptions. On the other hand, the production lot size should also be optimized by taking the CBM activities into account. Relatively fewer works have been done to investigate the impact of the CBM policy on production lot-sizing and to propose joint optimization models of both the economic manufacturing quantity (EMQ) and CBM policy. In this paper, we evaluate the average long-run cost rate of a degrading manufacturing system using renewal theory. The optimal EMQ and CBM policy can be obtained by minimizing the average long-run cost rate that includes setup cost, inventory holding cost, lost sales cost, predictive maintenance cost and corrective maintenance cost. Unlike previous works on this topic, we allow the use of continuous time and continuous state degradation processes, which broadens the application area of this model. Numerical examples are provided to illustrate the utilization of our model.