Abstract: The article introduces a processing capability index combined with reliability into describing dynamic degradation of a two-machine-one-buffer system, and studies a joint optimization method of preventive maintenance and buffer allocation. Considering the production states and operation characteristics of manufacturing system, we establish a multi-stage dynamic model to illustrate the buffer fluctuation, and discuss the corresponding buffer cost and shortage cost models comprehensively. The minimum total average cost is used to develop the optimal joint policy of preventive maintenance and buffer allocation. A numerical case is used to prove the effectiveness of the proposed policy and the results have demonstrated the significant effect of buffer allocation on cost saving.

Key words: preventive maintenance; buffer allocation; dynamic degradation; total average cost