A mathematical model for the economic justification of setup time reduction

A justification model for setup time reduction is presented. The model includes inventory carrying cost, setup cost, storage cost, setup time reduction cost, and quality cost. The level of setup time reduction which yields the lowest total cost indicates the extent to which setup time reduction is economically justified. A case study is presented based on one machine and one product. Results indicate that unlimited setup time reduction is not always justified based on the analysis of one product. However, a greater level of reduction is justified if the lot size is reduced appropriately as setup time is reduced.