Strategic Allocation of Inspection Effort In A Serial, Multi-Product Production System

For a multi-stage production system, optimal location of inspection activities is an important consideration in minimizing the inspection-related and salvage costs. Set-up and inventory carrying costs also become important factors when several products are produced on the same line due to the product changeovers involved. In this paper we discuss the effect of these additional costs (set-up and inventory carrying) on the inspection strategy, i.e., “all or none” versus partial inspection. We suggest a shortest path heuristic to determine the strategic location of inspection activities and the production lot sizes.