Economic Design of Moving Average Control Charts

Abstract

ABSTRACT The economic design of a control chart can reduce the cost of process control and promote the competitive capability of an enterprise. Many authors have studied the design of x¯, x¯ − R, x¯ − S, CUSUM, or EWMA charts from an economical viewpoint since Duncan proposed an economic design of x¯ control chart in 1956. Few studies, however, have attempted to focus on the economic design of a moving average (MA) control chart. Montgomery (2001) pointed out that an MA control chart is more effective than a Shewhart control chart in detecting small process shifts and is considered by some to be simpler to implement than the CUSUM. This paper provides a construction of an economic model to determine the optimal parameters of an MA control chart. A numerical example shows that the loss cost of the economic design of an MA control chart is lower than a conventional MA chart. The sensitivity analysis shows that magnitude of shift, the rate of occurrence of assignable causes and increasing cost when the process is out of control have a more significant effect on the loss cost.