Decisions about medical treatments and the settings of health programs are not purely technical, but also involve issues of value such as the evaluation of trade-offs between quality of life (morbidity) and quantity of life (mortality). The most commonly used measure of outcome in such cases is the quality-adjusted life year (QALY). The authors show that QALYs, being a health status index, do not stem directly from the individual's utility function and thus only partly reflect the individual's true preferences. This might lead to the choice of the nonpreferred alternative due to the misrepresentation of the individual's preferences. Two examples illustrate this claim. An alternative measure of outcome, the healthy-years equivalent (HYE), is described. This measure stems directly from the individual's utility function and thus fully reflects his/her preferences. It combines outcomes of both morbidity and mortality and thus can serve as common unit of measure for all programs, allowing comparisons across programs. Different ways of measuring the HYE are discussed.

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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org.. Palgrave Macmillan Journals and Operational Research Society are collaborating with JSTOR to digitize, preserve and extend access to The Journal of the Operational Research Society.The classical economic production lot size (EPL) model assumes a constant production rate that is predetermined and inflexible, and perfect quality. Recent models have removed the assumption of perfect quality while maintaining the inflexible production rate assumption. Production rates in many cases, such as orders filled by a machine, can be changed. Moreover, unit production cost and process quality depend on the production rate. In this paper, we extend the EPL model to cases where the production rate is a decision variable. Unit production cost becomes a function of the production rate. Also, the quality of the production process deteriorates with increased production rate. We solve the proposed model for special cost and quality functions and illustrate the results with a numerical example. The results show that, for cases where increases in the production rate lead to a significant deterioration in quality, the optimal production rate may be smaller than the rate that minimizes unit production cost. For cases where quality is largely independent of the production rate, the optimal production rate may be larger than the rate that minimizes unit production cost.Consider an example where weekly demand is 300 units, holding cost per unit per week is $0.2, and set-up cost is $1000. The cost to rework one unit is $100 and the percentage of defectives once the machine shifts 'out-of-control' is 30%. The following four cases are solved: Case 1. u(P) = 25000/P + 0.1P and f(P) = 0.0005P. Case 2. u(P) = 25000/P + 0.1P and f(P) = 1 x 10-6 P2. Case 3. u(P) = 33333.3/P + 1.333 x 1W4 P2 and f(P) = 0.0005 P. Case 4. u(P) = 33333.3/P + 1.333 x 10-4p2 and f(P) = 1 x 10-6P2.