Economic models and process quality control

Quality is an important business strategy in the economic and technological environment of today. To achieve high product quality, it is important to take explicit account of the cost of quality, and to use this cost as another management control. A new direction for achieving a cost‐effective quality management system is to design statistical process controls so as to directly incorporate quality costs. This paper discusses the major approaches to the economic design of statistical process controls, and compares several different model formulations. The practical implication of these techniques is stressed. In particular, two economic models of the chart are presented: a full economic model requiring a user‐specified process and nine cost parameters, and a semi‐economic model using five user‐specified parameters. Both of these could serve as approaches to reducing the total cost of process control. Because of its simplicity in application the semi‐economic model should gain greater acceptance by practitioners for the design of process control techniques.