There is a rapidly growing literature on modelling the effects of investment strategies to control givens such as setup time, setup cost, quality level. Recently, Hwang et al. studied the multiproduct economic lot size models in which setup reduction and quality improvement can be achieved with one-time initial investment. The aim here is to review and extend their work. First, the paper points out that their algorithms can produce irrelevant solutions, and clarifies the cause of the problem. Second, it provides a complete formulation and analyses for the general investment functions using the Lagrangean method. The algorithm to find an optimal solution is provided, and an example problem is solved to illustrate the algorithm.
