Optimizing Maintenance, Replacement, and Investment Decisions in an Economic Production Quantity Model under Machine Failure Uncertainty and Energy Consumption

This study develops an improved Economic Production Quantity (EPQ) model that incorporates stochastic machine availability, age-dependent reliability, and energy-efficiency investment options. Traditional EPQ models assume uninterrupted and perfect manufacturing. Nevertheless, real production systems often experience unpredictable machine malfunctions that disrupt production cycles, thereby affecting inventory levels, costs, and service efficiency. The proposed model addresses this deficiency by incorporating machine failure and repair processes, characterized by mean time between failures and mean time to repair, both of which vary with machine age and investment decisions. The framework explicitly links investment in maintenance, replacement, and energy-efficient technologies to improvements in reliability and reductions in energy consumption, promoting a lifetime perspective on production system performance. A stochastic optimization method is utilized to determine the joint optimal strategy for production quantity, maintenance planning, and capital investment in the context of uncertain machine availability. The model also evaluates the trade-off between preventive maintenance and decisions on replacement or upgrades. Analytical and numerical results demonstrate the conditions under which investments in machines with increased reliability or higher energy efficiency provide enhanced lifespan performance, as well as scenarios when maintenance is economically beneficial. The findings provide actionable insights for production managers and decision-makers seeking to balance operational efficiency, sustainability, and capital allocation in uncertain manufacturing environments.