Optimal process mean, specification limits, replenishment cycle time, and credit period for the buyer-seller model with specified capability value

Abstract

Statistical process control (SPC) is a preventive method for quality control and improvement. It can be applied in the manufacturing and service industry. Optimal process mean and economic specification limits settings are two important topics for SPC. In 2018, Banu and Mondal proposed an integrated inventory model with/without manufacturer’s product warranty and customer’s trade credit. Their model needs to obtain the optimal product warranty, retailer’s cycle length, and customer’s credit period with the maximum of the expected total profit per unit time. In this paper, the author addresses a modified Banu and Mondal’s model without product warranty for obtaining the optimal process mean, specification limits, retailer’s replenishment cycle time, and customer’s trade credit period under the specified process capability index C_pm value. Assume that the product quality is normally distributed with unknown process mean, known standard deviation, and nominal-the-best characteristic. Finally, a numerical example and sensitivity analysis of some parameters will be provided for illustration.

Subject Classification: (2010):

• 60 Probability theory and Stochastic processes

Keywords:

• Process mean
• Specification limits
• Replenishment cycle time
• Trade credit period
• Process capability index