Cost Analysis in a Production Inventory System: Managing Varied Production Rates, Service Interruption and Customer Retrial

This paper introduces the notion of service interruption within a production inventory system. Customer arrivals follow a Poisson process and service times are exponentially distributed. The system allows retrials for service, and production rates vary suitably to accommodate increased demand. If an item is out of stock, the server is occupied or an interruption occurs, a primary customer enters the orbit of infinite capacity; otherwise, the customer lost permanently. Retrial attempts for service can be made from the orbit. The system’s stability is assessed and key performance measures are defined. A relevant cost function is formulated and subjected to numerical and graphical analysis.