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Augmenting the Taguchi loss function with AHP to perform economic evaluation of reducing variations in processes and products

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Abstract
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This study combines the Taguchi loss function (TLF) and the analytic hierarchy process (AHP) to develop an asymmetric function to measure the loss associated with deviations from a target level for a particular quality characteristic (QC). To this end, initially, the domain of the permissible values for a QC is divided into two significant intervals - namely, the customer and manufacturer tolerances. AHP is then applied for obtaining weights for: 1) the quality characteristics; 2) various intervals within the two tolerance domains. An analysis of the cost savings accrued from the process improvement, using the proposed AHP-based asymmetric loss function, is presented to help decision-makers evaluate the viability and economic feasibility of improving a process. An illustrative example demonstrates the application of the suggested methodology and its ease of use and extent of applicability.

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Augmenting the Taguchi loss function with AHP to perform economic evaluation of reducing variations in processes and products
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