Determining quality risk for correlated bivariate normal characteristics

Most multivariate process capability indices proposed by other researchers provide quality measure in losses due to variability and being off-target. Some suggested loss function models that estimate losses due to rejection and quality costs but failed to consider the correlation between the multivariate quality characteristics. In this paper, we propose a novel new approach for estimating the total expected quality cost that provides quality cost measure not only in losses due to variability and being off-target but also losses due to rejection. The proposed model also estimates the quality costs for correlated quality characteristics with nominal specifications and provides the estimated costs due to individual characteristics; it helps to identify those process quality characteristics which have high variation when compared with their specification spread. The model will also improve the estimate of the rejection cost suggested by earlier researchers as it identifies the reject region as the region outside of the modified tolerance region. We present four different correlated bivariate normal process scenarios where the proposed method can be applicable and demonstrate that our approach provides a robust tool in estimating the risk of the product being rejected and performs as well as existing methods in estimating the total quality cost.