SIMULTANEOUS ECONOMIC SELECTION OF A VARIABLES AND AN ATTRIBUTE TARGET MEAN

The purpose of this paper is to develop a model for simultaneously sel ecting the optimal target means for both a variables and an attribute quality characteristic. The objective is to maximize the expected prof it per item. The expected profit per item depends on the revenue, the production cost, and the cost of maintaining the desired quality level . Optimality conditions are derived for the two target mean settings, from which a computational algorithm is constructed. A numerical examp le is provided to illustrate the application of the model.