Ds. Bai et Mk. Lee, OPTIMAL TARGET VALUES FOR A FILLING PROCESS WHEN INSPECTION IS BASED ON A CORRELATED VARIABLE, International journal of production economics, 32(3), 1993, pp. 327-334
The problem of selecting optimal target values for the mean of the qua
ntity Y of material in a container and the cutoff value on a correlate
d variable X is considered for a filling process in which a container
is nonconforming if its Y value is less than the lower specification l
imit and inspection is based on X instead of Y. A profit model is cons
tructed which involves selling price and filling, rework, inspection,
and penalty costs. Assuming that X and Y are jointly normally distribu
ted, a method of finding the optimal process mean and the cutoff value
on X is presented. An example from the cement industry is presented.