7/17/2019 Chapter 4

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In this chapter, we discussed tools to choose a batch size. Wedistinguished between setuptimes and setup costs. To the extent that a process faces setup times,we need to extendour process analysis to capture the negative impact that setups have

on capacity. We thenwant to look for a batch size that is large enough to not make theprocess step with thesetup the bottleneck, while being small enough to avoid excessiveinventory. To the extent that a process faces (outofpocket! setup costs, we needto balance thesecosts against the cost of inventory. We discussed the "#$ model forthe case of supplyarriving in one single %uantity (sourcing from a supplier!, as well as thecase of internal

production. &igure '. provides a summary of the ma)or steps youshould take whenanalyzing processes with *ow interruptions, including setup times,setup costs, or machinedowntimes. There are countless extensions to the "#$ model tocapture, among other