Kwei Tang

Design of Screening Procedures: A Review

It has been well accepted that dependence on inspection to correct quality problems is ineffective and costly, and hence screening (100% inspection) should not be used as a long-term solution for i...

Minimum time paths in a network with mixed time constraints

Abstract The time-constrained shortest path problems are generalized from and more realistic than the classical shortest path problem. These problems are most important subproblems in many large-scale real-world problems in the field of transportation. The problem considered in this paper is to find the shortest path in a new kind of time-constrained network, called a mixed time-schedule network, in which departures from some nodes are only allowed at some discrete points. This problem arises in many practical situations. For example, a shipping or transportation from one place to another may be through different kinds of vehicles such as (1) scheduled flights, ocean liners, trains, or buses and (2) rental cars, own cars or own trucks, where the vehicles in (1) have to follow predetermined departure-time schedules and the vehicles in (2) do not have time constraints. The time-constrained shortest path problem is an important generalization of the shortest path problem and has attracted much research interest in recent years. In a recent paper, a new time constraint, namely time-schedule constraint, is introduced. This time constraint assumes that every node in the network has a list of pre-specified departure times and requires that departure from a node take place only at one of these departure times. Therefore, when a time-schedule constraint is considered, the total time in a network includes traveling time and waiting time. In this paper, we consider a network consisting of two types of nodes in terms of their time constraints. The first type of nodes are subject to time-schedule constraints, but the second type is not. For such a network, a set of minimum time (shortest) path problems is studied, including minimization of total time, minimization of total time subject to a total traveling time constraint, minimization of total traveling time subject to a total time constraint and minimization of a weighted sum of total time and total traveling time.

Economic Design of a One-Sided Screening Procedure Using a Correlated Variable

In a complete inspection (screening) procedure, all of the items are subject to acceptance inspection. If an item fails to meet the predetermined inspection specifications, it is rejected and excluded from shipment. When the inspection on the performance variable is destructive or very costly, it may be economical to use another variable that is correlated with the performance variable and is relatively inexpensive to measure as the screening variable. Suppose that the performance variable is a “larger is better” variable and is positively correlated with the screening variable, The items for which the measured values of the screening variable are smaller than the screening specifications are rejected and excluded from shipment. An economic model for this screening procedure is developed with the consideration of the cost incurred by imperfect quality and the cost associated with the disposition of the rejected items. Solution procedures for the optima1 screening specifications are developed for three qua...

Learning effects on maintenance outsourcing

The objective of this paper is to study learning effects on maintenance outsourcing. We consider a situation in which a manufacturer offers a short-term outsourcing contract to an external contractor who is responsible for scheduling and performing preventive maintenance and carrying out minimal repairs when the process fails. The manufacturers payment to the contractor consists of a fixed amount along with cost subsidization for each maintenance operation performed. We assume learning occurs when the contractor performs preventive maintenance that reduces both time and cost. Two types of learning are considered: natural learning and learning by costly efforts. We demonstrate that a well-designed payment scheme can induce the contractor to adopt the maintenance schedule that maximizes the manufacturers profit.

Incentive maintenance outsourcing contracts for channel coordination and improvement

Consider a manufacturer who has a process with an increasing failure rate over time. In order to improve the process performance, the following two types of maintenance activity are outsourced to an external contractor: (i) preventive maintenance is performed periodically to improve the reliability of the process when the process is functional; and (ii) corrective maintenance is used to restore the process to a specified condition when it fails. We consider the use of incentive contracts to induce the contractor to select the maintenance policy that optimizes the total profit of the manufacturer and contractor. It is demonstrated that an incentive contract based on a combination of a target uptime level and a bonus always leads to the desired win-win coordination, and provides flexibility in allocating the extra profit generated from coordination and, importantly, an incentive to the contractor to improve the efficiency of the maintenance operations. The incentive contract can also be used to select the most economically efficient contractor from multiple contractors with different maintenance capabilities.

Cost analysis of two-attribute warranty policies based on the product usage rate

In the so-called two-attribute warranty policy, two types of warranty criteria, such as the age and mileage of an automobile, are employed simultaneously to determine the eligibility of a warranty claim. The authors propose in the paper several decision models that estimate the expected total cost incurred under various types of two-attribute warranty policies. They also perform a sensitivity analysis to study the effects of several model parameters, such as the discount rate, the product usage rate, and the warranty terms, on the total warranty cost.

Critical path in an activity network with time constraints

Abstract An acyclic graph with nonnegative weights and with a unique source and destination is called an activity network. A project comprised of a set of activities and precedence relationships can be represented by an activity network and the mathematical analysis of the network can provide useful information for managing the project. In a traditional activity network, it is assumed that an activity can begin any time after all of its preceding activities have been completed. This assumption does not adequately describe many practical situations, in which some kinds of time constraint are usually associated with an activity. In this paper, we investigate two types of time constraint commonly encountered in project management. The first is the time-window constraint , which assumes that an activity can begin its execution only in a specified time interval. The second is the time-schedule constraint , which requires that an activity begin only at one of pre-specified beginning times. An efficient, linear time algorithm for finding the longest path (critical path) and for analyzing the flow time of each arc is developed for activity networks with these time constraints.

Bayesian variables acceptance-sampling plans: quadratic loss function and step-loss function

In developing quality-control procedures, a step-loss function has been used implicitly or explicitly to describe consumer perceptions about product quality. A quadratic loss function has been suggested by Taguchi as an alternative to the step-loss function in measuring the loss due to imperfect product quality (cost of acceptance). In this article, Bayesian analyses of the known-standard-deviation acceptance-sampling problem are described for both the step and quadratic loss functions with three cost components—cost of inspection, cost of acceptance, and cost of rejection. A normal prior distribution is used for the lot mean. Efficient procedures for finding minimum expected cost procedures are given. For a particular example, comparisons are made of how optimal sampling plans and costs computed under the two cost structures change as the form of the prior distribution and misspecification of its mean and variance are varied. Sensitivity analyses for both cost functions show that the optimal sampling pla...

DETERMINATION OF THE OPTIMAL PROCESS MEAN WHEN INSPECTION IS BASED ON A CORRELATED VARIABLE

Consider a production process where items are produced continuously. A lower limit is specified for the quality characteristic of interest, and an item is defective if its value of the quality characteristic is smaller than the specification limit. The process mean (target value) may be set higher to reduce the costs incurred by producing defective items. Using a higher process mean, however, results in a higher production cost when production cost is an increasing function of the quality characteristic. An inspection procedure is used to screen outgoing items from the defective ones. In this paper, we consider a situation where inspection is based on a surrogate variable instead of the quality characteristic of interest. A model is developed to jointly determine the most economical process mean and the inspection specification limit.

The Effects of Inspection Error on a Complete Inspection Plan

Abstract In a complete inspection plan, every incoming item is subject to variable inspection. If the inspection result indicates that an item fails to meet predetermined specification limits, the item is reworked so that its quality characteristic is exactly equal to the target value. The specification limits are determined by the tradeoff among the cost incurred by imperfect quality, cost of rework and cost of inspection. The economic and statistical effects of inspection error on the complete inspection plan are investigated. Two models with considerations of inspection error are developed under different rework schemes, then compared with the model without inspection error consideration.