An economic model for the quality selection problem

The object of an economic model for the quality selection problem is to select the best parameter value for an input quality characteristic (X) so that the quality loss incurred on an output quality characteristic (Y) is minimized. The relation function between Y and X is assumed to be known throughout the article. In the work of Taguchi's experimentations, the selection of best parameter values is solved by two-step optimization when Y is adjustable. In the article, it is further extended to the case where Y is non-adjustable. An economic quality selection model with a general relation function is proposed based on a Taylor-series method for both adjustable and non-adjustable cases. A special case of a quality selection model with a quadratic relation function is also studied. A circuit example provided by Taguchi is presented to illustrate the use of this model.