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To cite this article: Jia-Chi Tsou (2010) Production system with process quality control: modelling and application,
International Journal of Systems Science, 41:7, 865-874, DOI: 10.1080/00207720903470130
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International Journal of Systems Science
Vol. 41, No. 7, July 2010, 865874
Over the past decade, there has been a great deal of research dedicated to the study of quality and the economics
of production. In this article, we develop a dynamic model which is based on the hypothesis of a traditional
economic production quantity model. Taguchis cost of poor quality is used to evaluate the cost of poor quality
in the dynamic production system. A practical case from the automotive industry, which uses the Six-sigma
DMAIC methodology, is discussed to verify the proposed model. This study shows that there is an optimal value
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of quality investment to make the production system reach a reasonable quality level and minimise the
production cost. Based on our model, the management can adjust its investment in quality improvement to
generate considerable financial return.
Keywords: Taguchi cost function; six-sigma; economics of production
*Email: jtsou.tw@yahoo.com.tw
practical case in the automotive industry, which obeys t target value of population mean of
the Six-sigma DMAIC methodology, is discussed to quality characteristic function
verify the proposed model. (I) population standard deviation of quality
In the next section, we introduce the model characteristic
proposed in this article. Then, a quality improvement 02 initial level of the variance of the system
case in automotive industry is used to verify this L2 minimum level of the variance of the
model. In this case, the Six-sigma DMAIC methodol- system
ogy will be used in the process of problem solving. X value of the quality characteristic
Then, we analyse the production cost of the case, and
Each term in our objective function is defined
the optimal value of quality investment with minimum
as below:
production cost is found. The last section presents
conclusions for this article. X
N
Production cost Qi P: 2
i1
Cr rejection cost/unit X
N
machines, etc. In our model, the setup cost is equal to 02 is the initial level of the variance of the system and
the summation of the setup cost in every period. In L2 is the minimum level of the variance of the system.
Equation (4), (Qi) is a function of lot size. (Qi) is As 0 0.1, L 0.05 and b 0.01, the function,
equal to zero when lot size is zero and (Qi) is equal (I), can be drawn as Figure 2.
to one when lot size is larger than zero. There are two categories of the cost of poor quality.
X
N Z1 One is direct cost and the other is indirect cost. The
PQC Qi L DI dX: 5 direct PQC encompasses two major types of expendi-
i1 1 ture: controllable PQC and resultant PQC.
The fourth term is the cost of poor quality. This Controllable PQC includes prevention cost and
term is the summation of the product of lot size and appraisal cost. Resultant PQC includes internal error
Taguchis PQC of unit product in every period. cost and external error cost. The other category, the
In Equation (5), D(I) is the quality distribution indirect PQC, includes customer-incurred PQC,
function of production, and we suppose the quality customer-dissatisfaction PQC and loss-of-reputation
characteristic performs as a normal distributive func- PQC (Harrington 1987).
tion. Under this hypothesis, we can write the quality In order to link the costs of poor quality and
distributive function as: quality performance, Taguchi has provided a quadratic
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Figure 1. Relationship between population mean and quality Figure 2. Relationship between population standard devia-
investment. tion and quality investment.
868 J.-C. Tsou
bottom tube, and found that the assembly of the 3.5. Control
defective absorber was too loose. This evidence further We identified the bottom tube diameter as the high
supports our conclusion. We also arranged a series of impact characteristic (HIC) and drew X-bar R chart to
tests to verify our logic. According to the conclusion control the manufacturing process. All these actions
above, we focus on controlling the dimension of the were fed back to the quality control plan of shock
bottom tube, which is controlled by the dimension of absorber. We also fed back this case to the PFMEA of
the pressing mould in the manufacturing process. A the manufacturing process. To sustain the benefit of
picture of the pressing mould is shown in Figure 7, quality improvement in the long run, the board decided
indicating its two pieces: the external mould and the to invest some money in quality improvement every
internal mould. The matching of the external mould year, and how much money to invest is the topic of the
and the internal mould will determine the dimension of next section. This money should be spent both in
the bottom tube. prevention and in appraisal quality activities.
Prevention activities include: developing and imple-
menting a quality data-collecting and reporting system,
3.4. Improve developing the quality process control plan, quality-
related training, job-related training, preventing this
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Figure 7. Pressing mould of bottom tube: the internal mould (left) and the external mould (right).
International Journal of Systems Science 871
line, the minimum level of the production variance t target value of population mean of
was 0.0005 cm2. quality characteristic function 5 cm
With this information, the loss of poor quality 02 initial level of the variance of the
function, L, can be written as: system 0.01 cm2
( L2 minimum level of the variance of the
KX t 2 if 4:8 cm X 5:2 cm system 0.0005 cm2
L ,
Cr if X 4:8 cm, X 5:2 cm To calculate the objective function, we use the
K Cr =U , 2 computer software Mathematica 4.1 to do the calcu-
lation. The result has been listed in Table 2 and the
U 5:2 5 5 4:8 0:2 cm, computer program to do the calculation has been
shown in the appendix.
K 15=0:22 375:
The shifting of demand, supply, inventory and cost
The relationship between quality investment and is presented in Figures 811. In these figures, it can be
value of quality characteristic can be expressed as the noticed that the supply volume is the major effect too.
functions below: With the coefficient above, we can find the
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1 500 450
2 510 520
3 490 510
4 510 480
5 490 470
6 500 510
7 550 530
8 490 510
9 500 490
10 510 500
Figure 8. The shifting of supply with time.
872 J.-C. Tsou
Figure 9. The shifting of demand with time. Figure 11. The shifting of cost with time.
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874
Appendix A
J.-C. Tsou