Shortening Production Cycle Times Through Setup Reductions and Quality Level Improvements

Abstract

Abstract This paper addresses the issue of investing in reduced setup times and defect rates for a manufacturer of several products operating in a JIT environment. Demand for each product occurs at a constant rate. Production cycle times can be shortened by investing in setup time and defect rate reductions, respectively. The problem is to determine optimal levels of setup time reduction, defect rate reduction, and production cycle time for each product, subject to demand, process improvement budget, and manufacturing and warehousing capacity constraints, respectively. A general nonlinear optimization model of this problem is formulated. A convex geometric programming approximation of the model is developed in order to solve it. The approximation can be made to any desired degree of accuracy.