Impact of Unreliable Subcontracting on Production and Maintenance Planning Considering Quality Decline

Abstract

Manufacturing systems face several disturbances during production, such as sudden failures, defects, and unreliable subcontractors that reduce their production capacity. Currently, subcontracting represents an efficient alternative to support production decisions. The novelty of the study was the development of a new integrated model that properly coordinates production, subcontracting, and maintenances strategies in the context of stochastic uncertainty, quality deterioration, and random subcontracting availability. Such a set of characteristics has not been addressed before in the literature. A simulation–optimization approach was proposed to address such a stochastic model. A numerical case study was performed as an illustration of the approach and a comprehensive sensitivity analysis was performed to analyze the impact of several costs. Furthermore, the effect of the availability of the subcontractor and the producer was analyzed. The main finding of the study showed that the integrated model led to significant economic cost savings compared to other approaches that address such policies in isolation. The results also indicated that quality deterioration had a strong impact on the subcontracting rate and that the proposed joint control policy adequately coordinated these three key functions. The level of subcontracting participation was directly defined by its availability and the subcontracting cost.