The economic design of −x charts: A proactive approach

It has long been recognized that poor quality can only result in higher costs. Yet, the idea of reducing cost through better quality is not fully realized. Current models for the economic design of control charts provide strategies to maintain existing quality levels. In this research, a comprehensive cost model is developed to incorporate two cost functions. A reactive function, which accounts for all quality related costs incurred while maintaining a stable level of the process, and a proactive function, which accounts for the cost of process improvement. Using incremental economics, the two cost functions are assembled to allow an evaluation of process improvement alternatives based on their economic worth. Procedures for obtaining economically optimum designs for controlling the process mean are developed and designed experiments are utilized to investigate model performance over a wide range of input parameters. The results indicate that the model is sensitive to changes in 13 parameters, especially when the magnitude of the process shift is small.