Multiproduct economic lot size models with investment costs for setup reduction and quality improvement

Abstract

Setup time and cost reductions and quality improvements have been key issues in modern manufacturing systems. Advantages of setup time reduction are more significant when a single facility produces multiple products. This paper presents multiproduct capacitated economic production quantity models for a system in which setup reduction and quality improvement can be achieved with one-time initial investment. Problems for models with a power functional form of the investment costs are formulated as geometric programs, and closed-form solutions for the problems are obtained. Example problems are solved to illustrate the models.