Inspection scheduling for imperfect production processes under free repair warranty contract

To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.ejor.2006.09.062 Byline: B.C. Giri, T. Dohi Keywords: EMQ; Imperfect production processes; Inspection; Sequential policy; Warranty Abstract: The paper considers scheduling of inspections for imperfect production processes where the process shift time from an 'in-control' state to an 'out-of-control' state is assumed to follow an arbitrary probability distribution with an increasing failure (hazard) rate and the products are sold with a free repair warranty (FRW) contract. During each production run, the process is monitored through inspections to assess its state. If at any inspection the process is found in 'out-of-control' state, then restoration is performed. The model is formulated under two different inspection policies: (i) no action is taken during a production run unless the system is discovered in an 'out-of-control' state by inspection and (ii) preventive repair action is undertaken once the 'in-control' state of the process is detected by inspection. The expected sum of pre-sale and post-sale costs per unit item is taken as a criterion of optimality. We propose a computational algorithm to determine the optimal inspection policy numerically, as it is quite hard to derive analytically. To ease the computational difficulties, we further employ an approximate method which determines a suboptimal inspection policy. A comparison between the optimal and suboptimal inspection policies is made and the impact of FRW on the optimal inspection policy is investigated in a numerical example. Author Affiliation: Department of Information Engineering, Hiroshima University, 1-4-1 Kagamiyama, Higashi-Hiroshima, Japan Article History: Received 26 August 2004; Accepted 26 September 2006