Abstract In today's competitive world, production and inventory control in small and medium enterprises (SME) is considered as an important issue by managers, because of the influence of factors such as fluctuations in demand and failure of machines. Network Failure Prone Manufacture Systems (NFPMs) are type of production systems that failure of machines is assumed for them. In this paper, a multi-product network failure manufacturing system with perishable items is studied. The production control policy is based on the hedging point policy that contains producing and maintaining of products in order to respond to demand and avoid shortages. In this system, demand is constant and shortages (backlog and lost sale) have been allowed. The main goal of this paper is to determine the optimal production rates that minimize expected value of total production, holding, shortage, and perishable costs. Because of uncertainly and complexity of these systems, simulation optimization has been done using ARENA software. Finally, numerical example will show the efficiency of the proposed approach.