Research On The Model Of Economic Benefits For Six Sigma

Traditional quality management considered that it was not availed to improve the economic benefits of the enterprises in spite of too high or too low process capability indices (PCIs). We should make a choice so that the enterprises could gain their maximized profits under some standard of quality. But the viewpoint of Six Sigma is that it can decrease the costs of the enterprises and increase profits when the process is at the six sigma level by reducing the nonconforming rate.It's needed to be researched that how to calculate the economic benefits of Six Sigma project and drive the continuous implementation of Six Sigma project by the enterprises. At present, there are few objective researches on the economic benefits of Six Sigma, unless using some famous cases to illustrate the problem. This paper deduces econometric model of excess costs from the point of statistics and supply objective argument to measure the economic benefits for Six Sigma.This paper contains six chapters:Chapter one simply introduces the development of Six Sigma and related statistical technologies and Quality Economics.Chapter two studies the relationship between the PCIs and the nonconforming rate base on the traditional quality management.Chapter three illustrates how to calculate the sigma level and deduces the function between the sigma level and nonconforming rate whether the process has shift or not.Chapter four is the emphasis of this paper. In this chapter, we compare the two different points of the quality economic benefits. We not only establish the econometric model from the traditional viewpoint, but also deduce the econometric model to evaluate the economic benefits of Six Sigma base on the Quality Engineering and Loss Function of Taguchi. Our research has proved that the excess cost decreased quadratically by the increasing of the sigma level.Chapter five discusses how to measure the economic benefits of Six Sigma when the data is non-normal distributed. There are two methods to do this: first, transforming data; second, using different distributions directly. For the first one, we simply research the relationship between PCIs and nonconforming rate. For the second method, we bring forward some visualization to evaluate economic benefits based on the quality engineering.