An Integrated Production and Inspection Model With a Heuristic Product Inspection Policy When Inspection Errors Exist

Abstract

This study proposes a heuristic inspection policy to address the existence of type I and II inspection errors. The deterioration process often shifts from an in-control state to an out-of-control state toward the end of a production lot, producing more nonconforming products. As a result, if the initial (late-produced) products in a production lot are chosen for inspection, the products identified as nonconforming (conforming) may need to be inspected repeatedly. The decision regarding the demarcation point between initial and late-produced products, their respective inspection rounds, and the production lot size must be made simultaneously to minimize the expected total cost per conforming product. This paper provides numerical examples to explore the effect of inspection errors on the optimal production lot size, inspection policy, and the associated cost.