Affiliations: [a] Department of Industrial Engineering and Management, Yuan Ze University, Yuan-Tung Road, Chungli, Taoyuan, Taiwan, Republic of China. E-mail: chenyeeming@saturn.yzu.edu.tw | [b] Department of Information Management, Yu-Da College of Business, Miao-li, Taiwan, Republic of China
Abstract: For as long as there have been supply networks, there have been disruptions, and no supply chain, logistics system, or infrastructure network is immune to them. Recent events have highlighted the need for planners to consider the risk of disruptions when establishing supply networks. Supply networks disruptions have a number of causes and may take a number of forms, such as quality variance, equipment and machine unreliability, and defects and shortage incurred from imperfect production planning, implementation, and processing. In this paper, we classify the imperfect situations that the unreliability of production processes may create into eight independently recurrent categories. With the property of recurrence of Markov chain, the limiting probability of each imperfect production category can be calculated through the transition probabilities matrix generated from these imperfect production categories. Therefore, an adaptive (s, Q) production system with finite states forms a Markov chain to determine the reproduction point and the quantity of production can be established to smooth supply disruptions incurred from imperfect production.
Keywords: Economic Production Quantity (EPQ), Markov chain, disruptions
