BUS606: Operations and Supply Chain Management

In this paper, a method was proposed to calculate the specific capability indices for the process in the second stage of a two-stage process. The process in the second stage is affected by the process in the first stage; therefore, sometimes the incapability in the second stage is a result of the incapability of the first stage. We omitted the effect of the quality characteristic of the first stage on the quality characteristic of process in the second stage using the residuals. The process capability for the residuals shows the specific process capability of the process in the second stage. In addition, we proposed a method to determine the specification limits of the residuals based on the specification limits of the quality characteristics in the first and second stages. The simulation studies and the real case study showed that the process capability indices for the residuals calculate the specific process capability of the process in the second stage properly. This method can be extended to be used for the multistage processes with more than two stages. Future studies may also include calculating specific process capability indices for the multistage process when each stage has several correlated quality characteristics. The linear relation between quality characteristics is considered in this paper. Therefore, calculating specific process capability indices when the relations among quality characteristics are non-linear can be considered as future research.