Recently, one of the most important factors in Japanese production management and productivity improvement is known to be the use of JTT production concept augmented with the reduction of setup times and costs which also decreases lot sizes and inventories in a system.
Thus, in this thesis we analyze the effects of setup reduction in a single product dynamic capacitated lot sizing model. In our model, the reduction of setup time causes to increase production capacity and decrease variable setup cost simultaneously. As a whole both effects are conflict, when variable setup cost only decreases we obtain the same results as setup reduction of uncapacitated DLSM, and when production capacity only increases there exist irregular effects if demands are increasing. The sensitivity analysis of our model for changes in the parameters emphasizes the importance of capacity tightness against demands.
Finally, limitations of this study and suggestions for the further research are outlined.
