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Economically Optimum Design of Cusum Charts

Author

Listed:
  • Amrit L. Goel

    (Syracuse University)

  • S. M. Wu

    (University of Wisconsin)

Abstract

We present a procedure for the economic design of Cusum charts to control the mean of a process with a normally distributed quality characteristic. A model is derived which gives the long-ran average cost as a function of both the design parameters of the chart and the cost and risk factors associated with the process. The "pattern-search" technique is employed to determine the optimum values of the sample size, the sampling interval and the decision limit. The cost surfaces are investigated, numerically, to study the effects of changes in the design parameters and in some of the cost and risk factors.

Suggested Citation

  • Amrit L. Goel & S. M. Wu, 1973. "Economically Optimum Design of Cusum Charts," Management Science, INFORMS, vol. 19(11), pages 1271-1282, July.
    • Handle: RePEc:inm:ormnsc:v:19:y:1973:i:11:p:1271-1282
    DOI: 10.1287/mnsc.19.11.1271
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    Cited by:

    1. Łukasz Kuźmiński & Zdzisław Kes & Veselin Draskovic & Andrzej Gawlik & Marcin Rabe & Katarzyna Widera & Agnieszka Łopatka & Maciej Śniegowski, 2023. "Modelling of the Risk of Budget Variances of Cost Energy Consumption Using Probabilistic Quantification," Energies, MDPI, vol. 16(5), pages 1-16, March.
    2. W. Chiu & M. Leung, 1980. "A new Bayesian approach to quality control charts," Metrika: International Journal for Theoretical and Applied Statistics, Springer, vol. 27(1), pages 243-253, December.
    3. Amir Ahmadi-Javid & Mohsen Ebadi, 2021. "Economic design of memory-type control charts: The fallacy of the formula proposed by Lorenzen and Vance (1986)," Computational Statistics, Springer, vol. 36(1), pages 661-690, March.
    4. Simpson, James R. & Keats, J. Bert, 1995. "Sensitivity study of the CUSUM control chart with an economic model," International Journal of Production Economics, Elsevier, vol. 40(1), pages 1-19, June.

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