The optimum target values for a production process with three-class screening

For situations where an item is sold in one of two markets with different profit/cost structures or scrapped, economic selections of target values for the mean of the quality characteristic Y of interest and the screening specification limits on a correlated variable X which is correlated with Y are...

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Bibliographic Details
Published in:International journal of production economics 1997-04, Vol.49 (2), p.91-99
Main Authors: Lee, Min Koo, Jang, Joong Soon
Format: Article
Language:English
Subjects:
Correlated variable
Correlation analysis
Cost structure
Industrial economics
Industrial engineering
Mathematical models
Operations research
Optimization
Production process
Profit maximization
Quality control
Studies
Target values
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Summary:For situations where an item is sold in one of two markets with different profit/cost structures or scrapped, economic selections of target values for the mean of the quality characteristic Y of interest and the screening specification limits on a correlated variable X which is correlated with Y are proposed. Two profit models based on Y and X are constructed which involve four profit/cost components: profit, production, inspection, and penalty costs. Assuming that X and Y are jointly normally distributed, methods of finding the optimal process mean and the screening specification limits on X are presented and an illustrative example is given.
ISSN:0925-5273
1873-7579
DOI:10.1016/S0925-5273(96)00118-1