A new loss function‐based method for evaluating manufacturing and environmental risks
- 11 September 2007
- journal article
- Published by Emerald in International Journal of Quality & Reliability Management
- Vol. 24 (8), 861-887
- https://doi.org/10.1108/02656710710817135
Abstract
Purpose: The purpose of this research is to provide a new loss function‐based risk assessment method so the likelihood and consequence resulting from the failure of a manufacturing or environmental system can be evaluated simultaneously.Design/methodology/approach: Instead of using risk matrices of the occurrence and consequence separately for evaluating manufacturing and environmental risks, an integrated approach by exploring the relationship between process capability indices: Cp, Cpk and Cpm, and three different loss functions: Taguchi's loss function; Inverted normal loss function (INLF); and Revised inverted normal loss function (RINLF) is proposed.Findings: The new method of quantitative risk assessment linking the likelihood and expected loss of failure is illustrated by two numeric examples. The results suggest that the revised inverted normal loss function (RINLF) be used in assessing manufacturing and environmental risks.Practical implications: It gives decision‐makers a concrete tool to assess the likelihood and consequence of their processes. Linking the process capability indices and loss functions is particularly promising, as this provides a useful risk assessment tool for practitioners who want to reduce hazardous waste and manufacturing losses from their facilities.Originality/value: The manufacturing and environmental risks are determined by paring the process capability indices and loss function. From the loss function‐based estimation, one can quantify the consequence of a manufacturing loss and get the severity rating in an objective way.Keywords
This publication has 11 references indexed in Scilit:
- Achieving competitive advantage through quality and environmental managementEnvironmental Quality Management, 2004
- Evaluating environmental performance using statistical process control techniquesEuropean Journal of Operational Research, 2002
- Research challenges in environmental managementEuropean Journal of Operational Research, 2000
- A General Class of Loss Functions with Industrial ApplicationsJournal of Quality Technology, 1998
- ECONOMIC DESIGN AND DEVELOPMENT OF SPECIFICATIONSQuality Engineering, 1994
- The reflected normal loss functionThe Canadian Journal of Statistics / La Revue Canadienne de Statistique, 1993
- Process risk evaluation—What method to use?Reliability Engineering & System Safety, 1990
- Quality Engineering using Design of ExperimentsPublished by Springer Science and Business Media LLC ,1989
- AN APPROACH FOR DEVELOPMENT OF SPECIFICATIONS FOR QUALITY IMPROVEMENTQuality Engineering, 1988
- Process Capability IndicesJournal of Quality Technology, 1986