Economic statistical design of S control charts using Taguchi loss function

An economic statistical design approach takes statistical properties into account while designing control charts economically. It improves both statistical design and economic design. In this paper, we present a statistically constrained economic model for the optimal design of S control chart for controlling process variability. In the model, the process quality can be affected by an assignable cause resulting in a shift of the variance of the distribution of output when it is operating according to its capability. The parameters are obtained by minimizing a total cost function proposed by Lorenzen and Vance, which is embellished with Taguchi loss function, subject to additional statistical constraints on average run length or average time‐to‐signal (ATS). Sensitivity analysis of the minimum cost will be performed to depict the effect of the choice of ATS bounds.