1813-713X Copyright © 2012 ORSTW International Journal of Operations Research Vol. 9, No. 3, 141150 (2012) Managerial Efficiency with Disrupted Production System Uttam Kumar Khedlekar 1 , Diwakar Shukla 2 and Raghovendra Pratap Singh Chandel 3 1, 2 Department of Mathematics and Statistics, Doctor HariSingh Gour Vishwavidyalaya (Sagar Central University), Sagar, Madhya Pradesh, India 3 Department of Mathematics and Computer Sciences, Model Science (Autonomous) College, Jabalpur, Madhya Pradesh, India Received December 2011; First Revised March 2012; Second Revised May 2012; Accepted June 2012 Abstract  Production system may be affected due to labor problem, manufacturing defects, machine breakdowns etc. and those reduce the reliability of system and also affect the goodwill of product. Before a production system disrupts, management needs to study the variation of demand pattern and customer arrival pattern. Many models are developed in literature with constant demand rate. In this paper, we incorporate variable demand rate and the uniform production rate both, and suggest a flexible managerial decision policy for a disrupted production system. The disruption based problem is solved analytically to determine production time before and after disruptions. An attractive feature of the approach is that both increasing and decreasing trends of demand are analyzed for deteriorating items with useful outcomes and results. A graph based simulation study is appended in order to find which of the model parameter is having most significant effect for a disrupted production system. Keywords  Inventory, disrupted production system, deterioration, shortage 1. INTRODUCTION Control and maintenance of a production system are challenging jobs for inventory managers and also attention oriented for researchers. There are many reasons who disrupt the production system like machine breakdown, supply chain disruption, unexpected events or acute crises. An oil-drilling company may be disrupted due to electricity supply, failure of drilling machines, labor strikes etc. Whereas oil refining company faces problem of crude oil supply, availability of other raw materials, earthquake and labor strike. So, management needs to make a policy/strategy to cope-up such type of problems. The amount received of input products may differ from the amount ordered, which also creates uncertainty in the system. In beginning the classic EOQ model does not include the chances of disruption in supply. Parlar and Berkin (1991) modeled for the economic ordered quantity under disruption in which demand is deterministic and also when inventory management has no stock and the supplier is down or lost. Berk and Arreola-Risa (1994) showed the cost function used in Parlar and Berkin’s model (1991) is incorrect and provided the correct model. Due to a disrupted production system, management not only fails to achieve the turnover but also loses creditability in the market resulting, that customers may turn to another product. Lin and Kroll (2006) solved the production problem under an imperfect production system subject to random machine breakdowns. They assumed that production rate and deterioration rate are fixed. Under this policy, the production runs is aborted when a breakdown occurs. The time-to-shift and the time-to-breakdown are two random variables follow different exponential distributions. Ma et al., (2010) revisited the same idea with assumption that after a period the process may shift to an out-of-control state at random time, and machine produces defective item, and could not be repaired or reworked. Mishra and Singh (2011) considered Weibull distribution deterioration in disrupted production system and analyzed the model in different situations. Market of any product depends on customers’ responses, and quality of competitor’s product. When supply change, company faces problems to fulfill the customer’s demand otherwise they may turn to competitors’ product. This reduces the market share of company and also reduces the profit. These aspects has been considered by Chen and Zhang (2010) and studied a three-echelon supply chain system which consists of suppliers, one manufacturer and other customers under demand disruption and optimizes the total average cost. They recommended to companies to run the stress test which involves estimating how the company will perform and which supplier should be selected under unusual market moves. Teng and Chang (2005) presented an economic production quantity model for deteriorating items when the demand rate depends not only on display stock, but also on the selling price per unit of an item. Also demand rate may influence by  Corresponding author’s email: uvkkcm@yahoo.co.in International Journal of Operations Research