The Procurement Policy and Optimal Stopping Time of Machining Tools

This research studies the impact of maximum allowable stopping time for machining tools on the production-inventory policy under a variable tools lifespan and demand. A mathematical model is developed to determine the optimal maximal allowing stopping time, the inventory level, and the replenishment interval. A numerical example was conducted using an exhaustive searching method to show the implementation of our model. The results indicate that, compared to the traditional policy which only repairs and replace the broken tools, adopting a maximum allowable stopping time dramatically reduced the total production cost.