Successively more complex Markov models are used to describe an easily understood production process. As the models become more complex, they become more useful, in particular including more cost categories and more types of data. Rework and work-in-process inventories are modelled, together with inspections and scrap rates, and a method is shown for taking tool wear into account. The scheduling impacts of rate-dependent tool wear are also analysed using the Markov models developed.