The impact of random machine unavailability on inventory policies in a continuous improvement environment

There are production situations where a production facility (e.g. a machine ) is used intermittently to produce lot sizes of certain products. Upon com pletion of production run, the facility may not be available for a random a mount of time due to several reasons, such as: the facility needs to be mai ntained and the maintenance time is random due to unforeseen circumstances; or that the facility is leased by different manufacturers and the demand f or the facility is random. As a result of machine unavailability, stock-out situations might arise. This paper extends the work of Abboud et al. (2000 , Computers and Operations Research, 27, 335-351) by assuming learning and forgetting in production. A new mathematical model is developed with numeri cal examples and sensitivity analysis provided. Furthermore, this paper det ermines how the overall inventory cost is influenced by the nature of the r andom variable that represents the unavailability time of the production fa cility.