Design of adaptive EWMA control charts using the conditional false alarm rate

Dynamic control limits can be useful in designing control charts, especially when sample sizes, risk scores, or other covariate values change over time. Computer simulation can be used to control the conditional false alarm rate and thus the in-control run length properties. We show that this approach can be useful in designing adaptive exponentially weighted moving average (AEWMA) control charts for which the control chart smoothing parameter at a given time point depends on the observed value at that time point. We use AEWMA charts as examples, but the approach can be applied to the adaptive cumulative sum (CUSUM) chart and other types of adaptive charts.