Optimization of single-manufacturer multiple-contractors outsourcing relationship in integrated approach of production, maintenance and quality

In this paper, we consider a manufacturer company composed of a single randomly failing and repairable machine that produces a single product. It should satisfy the global market demands in exogenous delivery periodicities where postponement or backlogging of shortage quantities are allowed and generate a penalty cost. This manufacturer is in relationship with n independent contractors. We consider outsourcing costs depend on the rate of non-conforming product, also the production rate dependent failure rate. The aim of this research is to determine the appropriate contractors and the associated quantity for each order which maximize the expected total profit for the manufacturer company. We propose a mathematical model and we develop a genetic algorithm based optimization procedure to solve the proposed model. We discuss and conduct computational experiments to study the managerial insights for the developed strategy.