ECONOMIC DESIGN OF THE SPECIFICATION REGION FOR MULTIPLE QUALITY CHARACTERISTICS

Economic specification limits have typically been developed on the bas is of a single quality characteristic. From the viewpoint of the custo mer, products are often evaluated based on multiple quality characteri stics. The specification region for multiple quality characteristics m ust be determined on an economic basis where we minimize the total los s to both the producer and the customer and thus to the whole society. In this paper a multivariate normal distribution is considered for th e quality characteristics. The specification region is given by trunca ting the multivariate normal distribution. We present the optimization model to develop the specification region for multiple quality charac teristics based on the framework of multivariate quality loss function .