Abstract
The loss-based process capability index C pm , sometimes called the Taguchi index, has been proposed to the manufacturing industry as a method to measure process performance. The index C pm takes into account the targeting degree of the process, which essentially measures process performance based on average process loss. Based on the C pm index, a mathematically complicated approximation method was developed previously for selecting a subset of processes containing the best supplier from a given set of processes. The present paper implements this method and develops a practical step-by-step procedure to aid supplier selection decisions. The accuracy of the selection method is investigated using a simulation technique. The accuracy study provides useful information about the sample size required for a designated selection power. A two-phase selection procedure is developed to select a better supplier and to examine the magnitude of the difference between the two suppliers. Also investigated is a real-world case on the super twisted nematic liquid crystal display manufacturing process, and it is applied to the selection procedure using actual data collected from the factories to reach a decision in supplier selection.