JOINT ECONOMIC DESIGN OF MEAN AND VARIANCE CONTROL CHARTS

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Abstract
This paper develops an economically designed x¯ − s2 control chart and compares it to the economically designed x¯ − R control chart in terms of loss cost, power and Type I error. Specific case examples are given. The results show that the x¯ − s2 control chart has lower minimal cost and higher power than the x¯ − R control chart. The paper also presents a very good index to show, firstly, the joint effect of power and loss cost and, secondly, the joint effect of Type I error and loss cost. The numerical study also shows the x¯ − s2 control procedure is better than the x¯ − R control procedure in terms of both, power and cost, and type 1 error and cost, in most cases.