Quality Engineering for the Management
3. Monetary evaluation on quality level of manufactured product
1999 Volume 7 Issue 4 Pages 4-10
Details
1999 Volume 7 Issue 4 Pages 4-10
If a defective product is not skipped to customers, the product does not affect customers. Therefore the percent defectives is not a good quality measure. Many manufactures now accept to use the process capability Cp defined by the following measure
Cp=Tolerance/(6×σ)
However, process capability index Cp is not monetary evalution, The management prefers to use monetary measure. Quality loss is defined by the following monetary measure
L=(A/9)×(1/Cp2)
Where A is the loss per defective product. This paper discuss the monetary measure for management.
