Lot sizing with quality improvement and setup time reduction

In this paper we develop a model that considers process quality improvement and setup cost reduction. The distinctive characteristics of our model are embodied in the assumptions that production rate is finite and cost of attaining close to zero setup time is not infinite. Additionally, the process layout makes possible spotting problems at the place of appearance and these problems can be fixed. The outcome of our analysis under these assumptions supports the popular operations paradigm that reducing response time and increasing process reliability are parallel processes.