Trade-off analysis versus constrained optimization with an economic control chart model

Abstract

Trade-off analysis after optimization of an economic CUSUM control chart is proposed. This procedure exploits the relatively flat response surface in the neighborhood of the optimal design. Comments are made with respect to criticisms of pure economic models and the difficulties with constrained optimization. Two previously published numerical examples are used to demonstrate that, by using trade-off analysis, large gains in statistical properties are attainable with little increase in cost. By focusing on designs with improved in-control and out-of-control run length performance, false-alarm rates can be reduced and the ability to detect process shifts quickly can be increased.