Quality improvement and setup reduction in the joint economic lot size model |
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| Institution: | 1. Department of Economics and College of Business, Stony Brook University, Stony Brook, NY, 11794, USA;2. Department of Economics, London School of Economics, London, UK;1. Department of Physics, Acharya Nagarjuna University, Nagarjuna Nagar 522 510, India;2. Department of Physics, VNR Vignana Jyothi Institute of Engineering and Technology, Hyderabad 5000 090, India;3. Institute of Physics, Polish Academy of Sciences, al. Lotników 32/46, 02-668 Warszawa, Poland;4. Institute of Physics, Kazimierz Wielki University, ul. Weyssenhoffa 11, 85-090 Bydgoszcz, Poland;5. Institute of Physics, Mathematical and Natural Science Department, Jan Dlugosz University, PL-42200 Czestochowa, Poland;1. Physics Department, Madhyanchal Professional University, Bhopal, MP 462044, India;2. Department of Applied Physics, Samrat Ashok Technological Institute, Vidisha, MP 464001, India;3. Department of applied mathematics, JSS Academy technical education, Noida 201301, India;1. Department of Physics, Bangalore University, Bangalore 560 056, India;2. Department of Physics, FMKMC College, Constituent College of Mangalore University, Madikeri 571 201, India;1. Department of Physics, Sri Venkateswara University, Tirupati 517502, India;2. Institute of Sensors, Signals and Systems & Institute of Photonics and Quantum Sciences, School of Engineering and Physical Sciences, Heriot-Watt University, Edinburgh EH14 4AS, United Kingdom;3. Light Technology Institute (LTI), Karlsruhe Institute of Technology, Engesserstrasse 13, 76131 Karlsruhe, Germany;4. Institute of Microstructure Technology (IMT), Karlsruhe Institute of Technology, Hermann-von-Helmholtz-Platz 1, 76344 Eggenstein-Leopoldshafen, Germany |
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| Abstract: | The co-maker concept has become accepted practice in many successful global business organizations. This fact has resulted in a class of inventory models known as joint economic lot size (JELS) models. Heretofore such models assumed perfect quality production on the part of the vendor. This paper relaxes this assumption and proposes a quality-adjusted JELS model. In addition, classical optimization methods are used to derive models for the cases of setup cost reduction, quality improvement, and simultaneous setup cost reduction and quality improvement for the quality-adjusted JELS. Numerical results are presented for each of these models. Comparisons are made to the basic quality-adjusted model. Results indicate that all three policies exhibit significantly reduced total cost. However, the simultaneous model results in the lowest cost overall and the smallest lot size. This suggests a synergistic impact of continuous improvement programs that focus on both setup and quality improvement of the vendor's production process. Sensitivity analysis indicates that the simultaneous model is robust and representative of practice. |
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