Selection of the optimal setup policy

A model is developed taking into consideration all the costs (namely cost of sampling, cost of not detecting a change in the process, cost of a false indication of change, and the cost of readjusting detected changes) incurred when a production process, using an unscheduled setup policy, utilizes fraction‐defective control charts to control current production. The model is based on the concept of the expected time between detection of changes calling for setups. It is shown that the combination of unscheduled setups and control charts can be utilized in an optimal way if those combinations of sample size, sampling interval, and extent of control limits from process average are used that provide the minimum expected total cost per unit of time. The costs of a production process that uses unscheduled setups in conjunction with the appropriate optimal control charts are compared to the costs of a production process that uses scheduled setups at optimum intervals in conjunction with its appropriate control charts. This comparison indicates the criteria for selecting production processes with scheduled setups using optimal setup intervals over unscheduled setups. Suggestions are made to evaluate the optimal process setup strategy and the accompanying optimal decision parameters, for any specific cost data, by use of computer enumeration. A numerical example for assumed cost and process data is provided.