In the production environment, there are many disruptions, such as machine breakdown, rush orders, and so on. Under these circumstances, the shipyards have to meet customer demand. If this is not done, the shipyard may face customer loss, since they cannot meet the deadline. So, it is very important to understand the effects of machine breakdown on system throughput. In this study, the hull production system of a shipyard situated in Turkey has been considered. In the first step of the study, the structure of the double bottom block, which is produced in the shipyard production system, and the workstations, which constitute the production system, were identified. Secondly, the simulation model of the production system was created using simulation software. By creating some machine breakdowns for various work stations in the production system, the effects of breakdown on system throughput have been investigated. As a result of the study, the critical rates of machine breakdown, which have affected system-throughput, have been determined. The main contribution of the study is to allow production engineers to take measures against machine breakdowns in advance, so that target throughput can be reached. (C) 2013 Sharif University of Technology. Production and hosting by Elsevier B.V. All rights reserved.