A new loss function for the selection of producer specification limits

Scott L. Rosen, M. Jeya Chandra

Research output: Contribution to journalArticle

Abstract

This paper presents a new approach to determining economical values for manufacturer lower and upper specification limits using a newly derived hybrid function for expected cost. The identification and use of specification limits are essential in protecting the producer from shipping defective products that pass unnoticed due to measurement error. This cost function is composed of four parts: a generic Taguchi loss function, a function for rework cost, a function for scrap cost, and a function that describes a variance to cost tradeoff. The expected cost function does not assume the process mean to be equal to the target value of the process nor is it restricted to being symmetrical. The cost function is implemented among different production systems and optimal values of manufacturer lower and upper specification limits are determined for each system. Significance: Determination of the specification limits which optimize the expected cost without sacrificing the functional requirement is important. We include Taguchi's loss function, because it captures the external failure cost.

Original languageEnglish (US)
Pages (from-to)117-125
Number of pages9
JournalInternational Journal of Industrial Engineering : Theory Applications and Practice
Volume13
Issue number2
StatePublished - Jun 1 2006

Fingerprint

Specifications
Cost functions
Costs
Freight transportation
Measurement errors

All Science Journal Classification (ASJC) codes

  • Industrial and Manufacturing Engineering

Cite this

@article{c8c29e61e99e4241bee8ae0e2e5f9643,
title = "A new loss function for the selection of producer specification limits",
abstract = "This paper presents a new approach to determining economical values for manufacturer lower and upper specification limits using a newly derived hybrid function for expected cost. The identification and use of specification limits are essential in protecting the producer from shipping defective products that pass unnoticed due to measurement error. This cost function is composed of four parts: a generic Taguchi loss function, a function for rework cost, a function for scrap cost, and a function that describes a variance to cost tradeoff. The expected cost function does not assume the process mean to be equal to the target value of the process nor is it restricted to being symmetrical. The cost function is implemented among different production systems and optimal values of manufacturer lower and upper specification limits are determined for each system. Significance: Determination of the specification limits which optimize the expected cost without sacrificing the functional requirement is important. We include Taguchi's loss function, because it captures the external failure cost.",
author = "Rosen, {Scott L.} and Chandra, {M. Jeya}",
year = "2006",
month = "6",
day = "1",
language = "English (US)",
volume = "13",
pages = "117--125",
journal = "International Journal of Industrial Engineering : Theory Applications and Practice",
issn = "1072-4761",
publisher = "University of Cincinnati",
number = "2",

}

A new loss function for the selection of producer specification limits. / Rosen, Scott L.; Chandra, M. Jeya.

In: International Journal of Industrial Engineering : Theory Applications and Practice, Vol. 13, No. 2, 01.06.2006, p. 117-125.

Research output: Contribution to journalArticle

TY - JOUR

T1 - A new loss function for the selection of producer specification limits

AU - Rosen, Scott L.

AU - Chandra, M. Jeya

PY - 2006/6/1

Y1 - 2006/6/1

N2 - This paper presents a new approach to determining economical values for manufacturer lower and upper specification limits using a newly derived hybrid function for expected cost. The identification and use of specification limits are essential in protecting the producer from shipping defective products that pass unnoticed due to measurement error. This cost function is composed of four parts: a generic Taguchi loss function, a function for rework cost, a function for scrap cost, and a function that describes a variance to cost tradeoff. The expected cost function does not assume the process mean to be equal to the target value of the process nor is it restricted to being symmetrical. The cost function is implemented among different production systems and optimal values of manufacturer lower and upper specification limits are determined for each system. Significance: Determination of the specification limits which optimize the expected cost without sacrificing the functional requirement is important. We include Taguchi's loss function, because it captures the external failure cost.

AB - This paper presents a new approach to determining economical values for manufacturer lower and upper specification limits using a newly derived hybrid function for expected cost. The identification and use of specification limits are essential in protecting the producer from shipping defective products that pass unnoticed due to measurement error. This cost function is composed of four parts: a generic Taguchi loss function, a function for rework cost, a function for scrap cost, and a function that describes a variance to cost tradeoff. The expected cost function does not assume the process mean to be equal to the target value of the process nor is it restricted to being symmetrical. The cost function is implemented among different production systems and optimal values of manufacturer lower and upper specification limits are determined for each system. Significance: Determination of the specification limits which optimize the expected cost without sacrificing the functional requirement is important. We include Taguchi's loss function, because it captures the external failure cost.

UR - http://www.scopus.com/inward/record.url?scp=34047146412&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=34047146412&partnerID=8YFLogxK

M3 - Article

AN - SCOPUS:34047146412

VL - 13

SP - 117

EP - 125

JO - International Journal of Industrial Engineering : Theory Applications and Practice

JF - International Journal of Industrial Engineering : Theory Applications and Practice

SN - 1072-4761

IS - 2

ER -