A Modified Target Costing Technique to Improve Product Quality from Cost Consideration
Abstract
The target costing technique, mathematically discussed by Sauers, only uses the Cp index along with Taguchi loss function X − R control charts to set up goal control limits. The new specification limits derived from Taguchi loss function is linked through the Cp value to X − R control charts to obtain goal control limits. This study further considers the reflected normal loss function as well as the Cpk index along with its lower confidence interval in forming goal control limits. Withe the use of lower confidence interval to replace the point estimator of the Cpk index and reflected normal loss function proposed by Spring to measure the loss to society, this modified and improved target costing technique would become more robust and applicable in practice. Finally, an example is provided to illustrate how this modified and improved target costing technique works.
Keywords
Citation
Wu, H. (2005), "A Modified Target Costing Technique to Improve Product Quality from Cost Consideration", Asian Journal on Quality, Vol. 6 No. 2, pp. 31-45. https://doi.org/10.1108/15982688200500012
Publisher
:Emerald Group Publishing Limited
Copyright © 2005, Emerald Group Publishing Limited