The manufacturing system under study consists of a single-product batch-processing production unit supplying a downstream serviceable stock, as illustrated in Fig. 1. This stock is used to fulfill a continuous and constant market demand d. The production rate u(.) is flexible and can be set at any time at a value between 0 and a maximum level umax. The production unit is subject to a continuous operation-dependent degradation which leads to an increasing failure probability and an increasing proportion of defectives produced. Therefore, maintenance interventions are required to maintain and restore the performances of the production unit. In response to each failure event, a corrective maintenance (minimal repair) is undertaken, which returns the production unit to the ‘as-bad-as-old’ condition. To preventively cope with the system degradation, an imperfect PM is carried out as a part of the setup activity at the beginning of each production run. We consider that the efficiency of this imperfect PM decreases continuously as the production unit ages. Thus, we assume that the setup reduces the effective age a(.) of the production unit by a certain amount ɸ(.) called the improvement factor, which is a decreasing function of the real age A(.) [63]. In addition, a major perfect maintenance (overhaul) is conducted as soon as the rate of defective items produced reaches or exceeds a given threshold r. This feedback overhaul policy is used for two reasons. First, the PM during setups is insufficient to perfectly improve the production unit performance as its perfectness deteriorates with process usage. Second, because the product quality depends intimately on the production unit condition, the rate of defectives produced provides a relevant indication of the overall deterioration state, and it could therefore be useful as a control parameter for the overhaul scheduling.