Minimum loss design of bivariate T 2 control charts

Abstract Control charting is an important technique in statistical process control. When a control chart is applied to monitor a process, three design parameters (i.e., sample size, sampling interval, and control limit) should be determined. In this article, we present a loss model of bivariate T2 control charts by incorporating the bivariate loss function (which considers the customers' potential cost) into the cost model given in Montgomery and Klatt [17]. The purpose of this loss model is to determine the three design parameters such that the average total loss (ATL) per unit of product is minimized. Some sensitivity analyses are conducted to study the effects of the model parameters on the optimal solution of the loss model.