THE ECONOMICALLY-BASED EWMA CONTROL CHART

An economic model is provided and evaluated for the EWMA control schem e to determine the optimal design parameters (n, h, k, alpha). A compu terized optimization technique is employed to determine the optimal de sign parameters. Comparisons are performed among the EWMA, CUSUM, and standard XBAR control charts. This paper shows that, from an economic viewpoint, the EWMA is almost as good as the CUSUM scheme; it is super ior to the standard XBAR control chart. Also, economically determined EWMA charts are truly optimal, from both the economic and statistical viewpoints, under certain conditions.