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http://dx.doi.org/10.7469/JKSQM.2021.49.4.467

Determination of Control Limits of Conditional Variance Investigation: Application of Taguchi's Quality Loss Concept  

Pai, Hoo Seok (Division of Shipping Management, Korea Maritime and Ocean University)
Lim, Chae Kwan (Department of Distribution Management, Tongmyong University)
Publication Information
Journal of Korean Society for Quality Management / v.49, no.4, 2021 , pp. 467-482 More about this Journal
Abstract
Purpose: The main theme of this study is to determine the optimal control limit of conditional variance investigation by mathematical approach. According to the determination approach of control limit presented in this study, it is possible with only one parameter to calculate the control limit necessary for budgeting control system or standard costing system, in which the limit could not be set in advance, that's why it has the advantage of high practical application. Methods: This study followed the analytical methodology in terms of the decision model of information economics, Bayesian probability theory and Taguchi's quality loss function concept. Results: The function suggested by this study is as follows; ${\delta}{\leq}\frac{3}{2}(k+1)+\frac{2}{\frac{3}{2}(k+1)+\sqrt{\{\frac{3}{2}(k+1)\}^2}+4$ Conclusion: The results of this study will be able to contribute not only in practice of variance investigation requiring in the standard costing and budgeting system, but also in all fields dealing with variance investigation differences, for example, intangible services quality control that are difficult to specify tolerances (control limit) unlike tangible product, and internal information system audits where materiality standards cannot be specified unlike external accounting audits.
Keywords
Conditional Variance Investigation; Control Limit Policy; Taguchi's Quality Loss Function; Decision Making of Information Economics; Bayesian Probability Theory;
Citations & Related Records
Times Cited By KSCI : 1  (Citation Analysis)
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