Determining economic manufacturing quantity, the optimum process parameters based on Taguchi quadratic quality loss function under rectifying inspection plan

The problem of determining the optimal economic manufacturing quantity and the optimal process parameters is an important problem in production and quality control. This problem has been addressed by Chen and Lai using profit maximization as a criterion to obtain the optimal manufacturing quantity and the mean of the process. In this paper Chen and Lai has been extended to determine the optimal manufacturing quantity, the mean and the variance of the process and the specification limits using rectifying inspection. The simulated annealing approach has been applied to obtain the optimal solution. The utility of the model is demonstrated via a realistic example. The model developed can be utilized to determine the optimal economic manufacturing quantity and process target simultaneously and is expected to provide more insights in managing this important problem.