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Economic design of an adaptive T 2 control chart

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  • Y-K Chen

    (National Taichung Institute of Technology)

Abstract

Varying three parameters of the Hotelling's T 2 control chart, namely, the sample size, the sampling interval length, and the action limit, results in a great improvement over the traditional T 2 control chart particularly for the small process shift. This paper presents the economic model for designing the variable parameters T 2 chart. In the economic design, a cost function is constructed, involving the cost of sampling and testing, the cost of false alarm, the cost to detect and remove the assignable cause, and the cost when the process is operating out-of-control. Also, a heuristic method of finding optimal values of adaptive design parameters for minimizing the cost function is presented. Variable and fixed parameters T 2 control charts are compared with respect to the expected loss per unit time. Furthermore, the effects of the initial sample number (used for estimating the parameters of F-distribution) upon the operating cost and adaptive design parameters are examined.

Suggested Citation

  • Y-K Chen, 2007. "Economic design of an adaptive T 2 control chart," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 58(3), pages 337-345, March.
    • Handle: RePEc:pal:jorsoc:v:58:y:2007:i:3:d:10.1057_palgrave.jors.2602138
    DOI: 10.1057/palgrave.jors.2602138
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    References listed on IDEAS

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    1. Douglas C. Montgomery & Phillip J. Klatt, 1972. "Economic Design of T 2 Control Charts to Maintain Current Control of a Process," Management Science, INFORMS, vol. 19(1), pages 76-89, September.
    2. Chen, Yan-Kwang, 2004. "Economic design of control charts for non-normal data using variable sampling policy," International Journal of Production Economics, Elsevier, vol. 92(1), pages 61-74, November.
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    Cited by:

    1. Kumari, Anita & Kumar Sharma, Anil, 2017. "Infrastructure financing and development: A bibliometric review," International Journal of Critical Infrastructure Protection, Elsevier, vol. 16(C), pages 49-65.

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