Chapter 10, Problem 21E (0)

Step-by-step solution Show all steps

Step 1/5

Find the cost associated with the arbitary control chart design , , and .

Here, , , and . Thus, the risk for this control chart is .

Compute .

The general formula for is given by,

Substitute 3 for k, 2 for , and 5 for n in the above equation.

Thus, the value of is .

Step 2/5

Find .

Thus, the value of is .

Step 3/5

Find the expected value of false alarm.

Thus, the expected value of false alarm is .

Step 4/5

Find expected loss .

Use Excel to compute the expected loss.

Excel procedure:

Step 1: Name the cell A1 as Lambda and enter 0.01 in cell A2.

Step 2: Name the cell B1 as Delta and enter 2 in cell B2.

Step 3: Name the cell C1 as and enter 0.5 in cell C2.

Step 4: Name the cell D1 as and enter 0.1 in cell D2.

Step 5: Name the cell E1 as and enter 5 in cell E2.

Step 6: Name the cell F1 as and enter 2.5 in cell F2.

Step 7: Name the cell G1 as and enter 100 in cell G2.

Step 8: Name the cell H1 as g and enter 0.05 in cell H2.

Step 9: Name the cell I1 as and enter 2 in cell I2.

Step 10: Name the cell J1 as and enter 2 in cell J2.

Step 11: Name the cell K1 as and enter 500 in cell K2.

Step 12: Name the cell L1 as DELTA and enter 25 in cell L2.

Step 5/5
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Step 13: Name the cell A4 as n and enter 5 in cell A5.

Step 14: Name the cell B4 as k and enter 3 in cell B5.

Step 15: Name the cell C4 as h and enter 1 in cell C5.

Step 16: Name the cell D4 as alpha and enter 0.0027 in cell D5.

Step 17: Name the cell E4 as and apply “=1–0.0705” to obtain the value of power.

Step 18: Name the cell F4 as and enter 0.4992 in cell F5.

Step 19: Name the cell G4 as false alarm and enter 0.27 in cell G5.

Step 20: Name the cell H4 as numerator and apply “=(C2-D2*A5)*(1/A2+C5/E5–F5)/C5+F2+L2+G5*

(K2*J2+E2)+K2*J2+G2*(C5/E5–F5)” in cell H5.

Step 21: Name the cell I4 as denominator and apply “=1/A2+C5/E5–F5+J2*G5+I2” in cell I5.

Step 22: Name the cell J4 as E(L) and apply “=H5/I5” in cell J5 to obtain the expected loss value.

Thus, the value of expected loss obtained from EXCEL is .

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