Quality Improvement Using Capital Budgeting and Taguchi’s Function

Margavio, Geanie W.; Fink, Ross L.; Margavio, Thomas M.

doi:10.1108/02656719410064612

Cited by 10 publications

(8 citation statements)

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“…A few authors have addressed the issue of estimating these costs. One approach is to use Taguchi's loss function (Ross 1993;Margavio, Fink, and Margavio 1994). Giakatis, Enkawa, and Washitani (2001) classified external failure cost as quality loss, further establishing this link.…”

Section: Discussionmentioning

confidence: 99%

Estimation of Process Parameters to Determine the Optimum Diagnosis Interval for Control of Defective Items

Dasgupta

Mandal

2008

Technometrics

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The online quality monitoring procedure for attributes proposed by Taguchi has been critically studied and extended by a few researchers. Determination of the optimum diagnosis interval requires estimation of some parameters related to the process failure mechanism. Improper estimates of these parameters may lead to an incorrect choice of the diagnosis interval and thus huge economic penalties. We propose a Bayesian approach to estimate the process parameters under two different process models, commonly called as the case II and case III models in the literature. We discuss a systematic way to use available engineering knowledge in eliciting the prior for the parameters, and demonstrate the performance of the proposed method using extensive simulation and a case study from a hot rolling mill.

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Section: Discussionmentioning

confidence: 99%

Estimation of Process Parameters to Determine the Optimum Diagnosis Interval for Control of Defective Items

Dasgupta

Mandal

2008

Technometrics

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“…Some authors offered to use Taguchi's loss function to control external failure quality costs. Such components as lost sales (Margavio et al, 1994) and hidden failure costs (Albright & Roth, 1992;Kim & Liao, 1994) would be under control as well, for example, customers dissatisfaction, costs due to lost image and lost part of market. However, Taguchi's loss function does not present a particular method how external hidden failure quality costs could be calculated.…”

Section: Theoretical Backgroundmentioning

confidence: 99%

“…However, Taguchi's loss function does not present a particular method how external hidden failure quality costs could be calculated. (Moen, 1998;Margavio et al, 1994).…”

Section: Theoretical Backgroundmentioning

confidence: 99%

Hidden Costs in the Evaluation of Quality Failure Costs

Snieška

Daunorienė

Žekevičienė

2013

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In modern global market organizations striving for survive and successful compete have not only to satisfy needs of customers but to perform it with the least costs. Specialists of quality management determined that quality costs make a big part of total factor costs, taking about 30 % (Srivastava, 2008). Reducing of quality costs allows reducing of total organizational costs that would result in reducing of price of goods manufactured or services supplied, increase of customers' satisfaction or improved oeganization performance (JuranOrganizations that have prepared the programs of quality costs accounting adapted to their specific activity and paying more attention to implementation of quality programs, can identify, set in underlying order, evaluate and select quality investments more easy (Bottorff, 1997). Also quality costs programs allow calculation of return of investment to quality, help to find out how development is going (Gray, 1995), determine where highest costs appear and allow to find out what is the loss due to poor quality (Bottorff, 1997). Unfortunately, many organizations don't know their quality costs (Yang, 2008). Between the reasons determining the absence of quality costs accounting in the organization, following are indicated: use of many types of different accounting systems (Harry & Schroeder, 2000), traditional costs accounting systems are not adapted to identify quality costs data (Chiadamrong, 2003), lack of adequate methods to determine the results of poor quality (Chen & Yang, 2002). Studies performed by Viger & Anandarajan (1999) show that organizations that are calculating and analyzing quality costs, are making efficient decisions more often than those not calculating quality costs. Having calculated the loss due to poor quality and determined where its appearance is the largest, organizations can make decisions allowing optimization of quality costs. While optimizing quality costs, benefit increases (Fine & Charles, 1986;Freiesleben, 2005). Also, optimization of quality costs is a condition necessary to survive and anchor in the market. Quality costs programs were implemented and used worldwide (Carr, 1992; Schiffauerova & Thomson, 2006a). However, both the scientific literature and enterprises' practice still are having questions how to calculate all constituents of categories of quality costs in details in striving for maximal benefit from the system of accounting of quality costs. In the article there is discussion about the problems of quality costs accounting in striving for detailed calculation of all quality costs, a problem of lack of hidden failure quality costs accounting methodology analyzed, a review of literature on quality costs accounting models presented, the studies performed by other authors discussed, suggestions how to calculate hidden failure quality costs presented. An empirical study was performed in Lithuanian organization where methodology of accounting of constituents of hidden failure quality costs was tested.Keywords: external failure quality costs, e...

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“…A variety of applications of the Taguchi method in the manufacturing and service sector is found in the literature 10–14…”

Section: Experimental Designmentioning

confidence: 99%

The Taguchi method

Mitra¹

2011

WIREs Computational Stats

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Achieving robustness in product and process designs is of importance to various stakeholders such as manufacturers, suppliers, and consumers. As variability exists in all operations, it is desirable to create products and processes that are not very sensitive to factors that are not controllable. The Taguchi method is an approach to robust design. Inherent in the Taguchi method is the definition of a loss function. This loss function formulation is influenced by the type of quality characteristic under consideration, that is, smaller‐is‐better, larger‐is‐better, or target‐is‐best. Furthermore, based on the selected type of quality characteristic, a performance measure is defined. Such performance measures, usually called signal‐to‐noise (S/N) ratios, are used to determine optimal settings of the controllable factors. Typically, a two‐step procedure is adopted in the Taguchi method. In the first step, the S/N ratio is maximized, whereas in the second step, using an adjustment factor that does not affect the S/N ratio, the mean response is adjusted to meet the target value, where appropriate. Experimental designs make use of orthogonal arrays to determine factor settings for obtaining data for subsequent analysis. The number of experimental runs is very modest in relation to the number of factors being investigated. WIREs Comp Stat 2011 3 472–480 DOI: 10.1002/wics.169 This article is categorized under: Statistical and Graphical Methods of Data Analysis > Robust Methods Data: Types and Structure > Time Series, Stochastic Processes, and Functional Data

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Quality Improvement Using Capital Budgeting and Taguchi’s Function

Cited by 10 publications

References 1 publication

Estimation of Process Parameters to Determine the Optimum Diagnosis Interval for Control of Defective Items

Estimation of Process Parameters to Determine the Optimum Diagnosis Interval for Control of Defective Items

Hidden Costs in the Evaluation of Quality Failure Costs

The Taguchi method

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