The impact of reducing setup costs on the lot size and objectives of manufacturing

This paper points out the significance of setup costs reduction on the decrease of lot size. The authors demonstrate this phenomenon on a flexible manufacturing system simulation model. The research focus was to fully understand the relationships between the lot size and setup costs. The aim of research was to show an impact of lot size on the selected manufacturing objectives. For each series of experiments, the setup costs were continuously reduced, and then the optimal lot size was determined by simulation optimization. The procedure for lot size determination was proposed by the authors and is based on a simulation optimization method. The authors have expressed their hypothesis of the positive impact of the optimal lot size on the objective parameters fulfilment of a manufacturing system, especially the minimization of costs per unit, throughput time and work in progress and the maximization of number of finished products and machine utilization. The hypothesis was confirmed by the gained simulation experiment results.