Abstract
In this paper, an analysis model is formulated to resolve the economic justification of machine changeover time reduction in a manufacturing cell. This model examines the effects of changeover time reduction for each machine and minimizes the total relative cost in the manufacturing cell while demand is variable. Adding the concept of a product's life cycle, we develop a mathematical model to deal with variable demand in the planning horizon. The budget constraint is also added to meet the conditions of different invested amounts. Finally, an example, which is derived from different set-up time reduction projects, and simulated production environment is used to demonstrate the details of the model. The optimum investment amount on changeover reduction operation for each machine can be found via the proposed model and the maximum benefits are then obtained.
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