An absorbing Markov chain model for production systems with rework and scrapping

This work models the flow of material through the production system as an absorbing Markov chain characterising the uncertainty due to scrapping and reworking. A realistic estimate of material requirement computed by the model enables better system design, MRP, capacity requirement planning, and inventory control. The work identifies production system parameters under scrapping and reworking, and accurately estimates the quantity of raw materials required. This being a probabilistic model can handle the problem even when data on some intangible costs are not available.