A Quality Control Model with Learning Effects

We present a model that extends a variant of the classic quality control/machine maintenance model by adding the concept of quality-based learning. The extension captures the idea that operators of a production process may be able to discover and eliminate defects in the system if, during an inspection, they find the process to be “out of control.” Thus, the distinguishing feature of the model is that one inspects the process not only for the purpose of repairing the machine, but also in the hope that the machine will be caught in the act of producing defective output, so that a source of problems is uncovered and eliminated. The paper provides a characterization of optimal inspection policies and suggests the managerial implications: Ignoring the learning benefits of inspection and quality control activities may lead to under-investment in quality improvement activities, which, in turn, may hinder both cost and quality competitiveness.