This paper studies production planning of manufacturing systems of unreliab
le machines in tandem. The manufacturing system considered here produces on
e type of product. The demand is assumed to be a Poisson process and the pr
ocessing time for one unit of product in each machine is exponentially dist
ributed. A broken machine is subject to a sequence of repairing processes.
The up time and the repairing time in each phase are assumed to be exponent
ially distributed. We study the manufacturing system by considering each ma
chine as an individual system with stochastic supply and demand. The Markov
Modulated Poisson Process (MMPP) is applied to model the process of supply
. Numerical examples are given to demonstrate the accuracy of the proposed
method. We employ (s, S) policy as production control. Fast algorithms are
presented to solve the average running costs of the machine system fur a gi
ven (s, S) policy and hence the approximated optimal (s, S) policy. (C) 200
1 John Wiley & Sons, Inc.