PROCESS IMPROVEMENT VERSUS ENHANCED INSPECTION IN OPTIMIZED SYSTEMS

This paper analyses the cost-quality implications of process improvement versus inspection enhancement for n-stage serial production processes. The analysis determines, for a given environment, the combination of process and inspection performance that minimizes the cost of each defect-free unit produced. Insight into the process-improvement inspection-enhancement trade-off, is obtained by identifying a base-line environment and then varying key environmental parameters including: measures of production and inspection quality, functional relationships between these qualities and their costs, and penalty costs incurred by delivery of defective units to the customer. The results of the analysis are presented in the context of decisions or strategies for the immediate, short-run and long-run optimal combinations of process improvement and inspection enhancement.