An Analysis of Taguchi's On-Line Process-Control Procedure Under a Random-Walk Model

Abstract

The assumptions of the on-line process-control methods presented by Taguchi, Elsayed, and Hsiang (1989) are examined. Taguchi's method for obtaining control strategies is evaluated for the random-walk case. A method for approximating optimal control strategies is presented and compared with results obtained using Taguchi's method, with a new modification of Taguchi's method, and with simulation results.

KEY WORDS:

• Economic model
• Quadratic loss
• Statistical process control