Quality control and product servicing: A decision framework

It is shown that, by considering the joint problem of inspection and service capacity, the cost function is no longer concave in screening efforts, and thus the optimal screening levels may not be simply 0 or 100%, as indicated by past studies.

Abstract

This paper considers the relationship between quality control and service provision. Since quality control efforts evidently impact the need for servicing, the joint design of both the levels of quality control and service capacity is warranted. A simple framework is developed to deal with this joint design problem. Two cases are considered. For degenerate probability functions of defective items, the quality control scheme becomes that of inspection screening. We show that, by considering the joint problem of inspection and service capacity, the cost function is no longer concave in screening efforts, and thus the optimal screening levels may not be simply 0 or 100%, as indicated by past studies. The capacity issue in fact leads to a higher level of screening in certain cases. For non-degenerate probability functions of defective items, sufficient conditions are derived, whereby the optimal quality control policy and servicing capacity can be readily obtained.