Joint determination of the optimum target mean and variance of a process

Recently, there has been a lot of interest in the economics of quality control. Many researchers have considered the problem of determining the optimal target mean for a process, but almost all of them have assumed that the process variance is fixed and known in advance. The problem of simultaneously determining the optimal target mean and target variance for a process is considered. This might result in a reduction in variability and in the total cost of the production process. A reduction in variability upholds the modern concept of Taguchi's loss function, which states that any deviation from the target value incurs economic loss, even when the quality characteristic lies within the specification limits. Taguchi's loss function is incorporated to extend this study further to jointly determine the optimal target mean and variance.