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Joint production control and product quality decision making in a failure prone multiple-product manufacturing system

This paper considers joint production control and product quality specifications decision making in unreliable multiple-product manufacturing system. This is with the knowledge that an optimum compromise should guide the decision making process. In fact, tight process specifications will generally lead to products with good quality and higher market values, but at the same time associated with a higher rate of non-conforming parts rejection leading to higher non quality costs and lower plant productivity. Moreover, in unreliable manufacturing context the decision maker should adopt an adequate production policy to hedge against future capacity shortages caused by machine failures in order to meet customer demand. This paper intends to extend previous findings to tackle this problem and study the overall decision making process aiming to guide the production and quality specification decisions in multiple-product context. The overall optimal decision policy is defined here as one that maximises the long term average per unit time profit of a combined measure of quality and quantity dependent sales revenue, minus inventory and backlog costs, in the presence of random plant failures and random repair durations.