Joint determination of optimum variable and attribute target means

F.J. Arcelus and M.A. Rahim

Naval Research Logistics (NRL), 1991, vol. 38, issue 6, 851-864

Abstract: This article considers the problem of joint control of attribute and variable quality characteristics of a given product. Items are acceptable if they meet the specifications for both types of quality characteristics at the same time. Otherwise, the items are sold as scrap at reduced prices. The objective is to determine simultaneously the target values for each characteristic so as to maximize the expected profit per item. Several item‐by‐item quality‐inspection plans are formulated on the basis of various inspection strategies. These strategies are defined in terms of whether the inspection is to be carried out simultaneously for both characteristics, or sequentially, or whether inspection for one of the characteristics is to be ignored. All these plans are shown to differ in terms of their profitability. However, they all yield equivalent quality standards. A numerical example is provided to illustrate the application of these models.

Date: 1991
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Persistent link: https://EconPapers.repec.org/RePEc:wly:navres:v:38:y:1991:i:6:p:851-864

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