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Power approximations in the economic design of control charts

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  • George Tagaras

Abstract

A new approximate method is proposed for the economic design of control charts based on an estimate of the power of the control chart at optimality. Multiple linear regression is employed for the derivation of the approximate formula expressing the power of the control chart as a function of the model parameters. A simple optimization procedure is then used to determine the economic design of the control chart for the predicted value of the chart's detection power. The application of the new approach is illustrated through Duncan's models for variables control charts for processes subject to single and multiple assignable causes. Evaluation of the performance of the approximate method indicates that the approximate control chart design is very close to the exact optimum while its implementation requirements are reduced.

Suggested Citation

  • George Tagaras, 1989. "Power approximations in the economic design of control charts," Naval Research Logistics (NRL), John Wiley & Sons, vol. 36(5), pages 639-654, October.
    • Handle: RePEc:wly:navres:v:36:y:1989:i:5:p:639-654
    DOI: 10.1002/1520-6750(198910)36:53.0.CO;2-D
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    References listed on IDEAS

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    1. W. K. Chiu, 1976. "Economic Design of np Charts for Processes Subject to a Multiplicity of Assignable Causes," Management Science, INFORMS, vol. 23(4), pages 404-411, December.
    2. Richard Ehrhardt, 1979. "The Power Approximation for Computing (s, S) Inventory Policies," Management Science, INFORMS, vol. 25(8), pages 777-786, August.
    3. Margaret R. Panagos & Russell G. Heikes & Douglas C. Montgomery, 1985. "Economic design of X¯ control charts for two manufacturing process models," Naval Research Logistics Quarterly, John Wiley & Sons, vol. 32(4), pages 631-646, November.
    4. George Tagaras & Hau L. Lee, 1988. "Economic Design of Control Charts with Different Control Limits for Different Assignable Causes," Management Science, INFORMS, vol. 34(11), pages 1347-1366, November.
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