This article presents a new index for evaluating the manufacturing processes based on a non-symmetric and flexible loss function. A combination of the squared error and absolute error loss functions can be considered as the model for the loss function. The Monte Carlo simulation procedure is discussed and investigated for the proposed loss-based index in three significant statistical problems, including: (1) the point estimation of the loss-based process capability index, (2) the construction of confidence intervals for the capability index, and (3) testing the capability on the basis of the non-symmetric loss function. The illustrative results are presented from a pipe manufacturing industry to explain the implementation of the proposed simulation procedure.

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