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To link to full-text access for this article, visit this link: http://dx.doi.org/10.1016/j.ejor.2004.08.002 Byline: Raymond G. Vickson (a), Elkafi Hassini (b) Keywords: Quality control; Process failure; Two-stage production; Lot streaming Abstract: We consider a two-stage batch manufacturing process in which the first stage shifts out-of-control at iid exponential times after starting in control. To improve quality, a production batch at Stage 1 is subjected to lot streaming: it is divided into sublots that are processed at Stage 1 and then passed one-by-one to Stage 2 for simultaneous inspection and processing. In any sublot, Stage 1 produces good items before the shift and bad items after. The state of Stage 1 is known as soon as a bad item is encountered in Stage 2, at which time Stage 1 is re-set to the in-control state. We examine both cases of continuous first-stage and continuous second-stage production. For each case we examine both LIFO and FIFO inspection and processing policies at Stage 2. We use nonlinear programming to develop lot streaming policies which minimize the expected number of defective items for LIFO and FIFO policies. We also develop simple approximately optimal policies and compare the output performance of optimal, approximately optimal and equal-lot policies (when applicable) in a numerical example. Author Affiliation: (a) Department of Management Sciences, University of Waterloo, Waterloo, Ont., Canada N2L 3G1 (b) DeGroote School of Business, McMaster University, Hamilton, Ont., Canada L8S 4M4 Article History: Received 29 March 2001; Accepted 24 March 2003

A study examines the use of nonlinear programming for quality control in batch manufacturing process.

Application of ratio objectives to explore profits of firms in different capacity expansions with the help of no-linear programming is analyzed.