Implementing lifetime performance index for the pareto lifetime businesses of the service industries

Abstract

Process capability analysis is an effective means of measuring process performance and potential capability. In the service industries, process capability indices (PCIs) are utilized to assess whether business quality meets the required level. Hence, the performance index CL is used as a means of measuring business performance, where L is the lower specification limit. In the technology of data transformation, this study constructs a uniformly minimum variance unbiased estimator (UMVUE) of CL based on the right type II censored sample from the pareto distribution. The UMVUE of CL is then utilized to develop a novel hypothesis testing procedure in the condition of known L. Finally, we give one practical example and the Monte Carlo simulation to assess the behavior of this test statistic for testing null hypothesis under given significance level. Moreover, the managers can then employ the new testing procedure to determine whether the business performance adheres to the required level.