Manufacturing systems with a production dependent failure rate: structure of optimality

This report provides the structure of a policy minimizing a long term, average, expected, backlog/inventory cost for a fluid model, single machine, single product manufacturing system subject to a failure/repair Markov process, where the failure rate is a piecewise constant function of the production rate. This policy generalizes previous results and confirms several conjectures reported in the literature, providing an interesting insight into the problem.