Quality improvement by variance reduction of component using learning investment allocation model

Improving customer satisfaction is important in order to create a good relationship between a company and its customers which will give benefit to both sides. One way to accomplish it is by conducting quality improvement. Quality improvement has a strong relationship with the customer satisfaction, so it is an important issue in manufacturing. This paper discusses an optimization model to allocate learning investment using exponential learning investment model and achieve quality improvement through variance reduction of component and assembly product. The variance reduction of as the results of investment has been made to increase the quality of the product. The implementation of the proposed model has been demonstrated by solving a numerical example problem that used a simple assembly product which consists of three components. Oracle Crystal Ball is used to solve the numerical example.