Absorbing Markov Chain Models to Determine Optimum Process Target Levels in Production Systems with Dual Correlated Quality Characteristics

For a manufacturing organization to compete effectively in the global marketplace, cutting costs and improving overall efficiency is essential. A single-stage production system with two independent quality characteristics and different costs associated with each quality characteristic that falls below a lower specification limit (scrap) or above an upper specification limit (rework) is presented in this paper. The amount of reworks and scraps are assumed to be depending on the process parameters such as process mean and standard deviation thus the expected total profit is significantly dependent on the process parameters. This paper develops a Markovian decision making model for determining the process means. Sensitivity analyzes is performed to validate, and a numerical example is given to illustrate the proposed model. The results showed that the optimal process means extremely effects on the quality characteristics’ parameters.