In this paper, we study the efficacy of alternative process improvement strategies for a container-filling production process. Three types of improvement actions to modify process parameters are considered: reducing the process setup cost, reducing the arrival rate of the out-of-control state, and reducing the process variance. It is assumed that these process parameters can be changed with a one-time investment. The concept of a planning horizon is introduced as a means for modeling the investment decision and corresponding process improvement benefit. Models are formulated to determine the optimal process improvement and production parameters that minimize the unit time expected cost across a given planning horizon. Numerical analysis is used to examine relationships among the optimal investment strategy, production policy, and length of the planning horizon.
International Journal of Production Economics, 66(1), 23-31