An Inspection Policy Model for Production Facilities

Inspection policy models describe stochastically failing systems in which failures are detected by inspections only. We develop such an inspection model for a production facility. The model generalizes the recent work of Munford as well as the classical work of Barlow et al. Revenues are accrued for each time unit in which the facility is known to be in good operating condition. The costs considered include inspection, operating and repair costs. We present a dynamic programming algorithm that maximizes the expected profit between two successive repairs. This algorithm is then imbedded within an iterative procedure that maximizes the expected profit per time unit and the expected profit per time unit of good operating condition.