where items are processed together, high correlation among
items yield (qualities) is observed. Further, Cheng (1997), Purintrapiban and Corley (2012), and Yu
and Xi (2008), investi- gate schemes for detecting quality correlation. They indicate that the
quality of materials can be auto-correlated due to cyclic behavior resulting from periodic rotation
of operators and sys- temic environmental changes (e.g. in temperature and humidity), as well as
sudden changes due to machine failures and introduc- tion of new workers. In particular, Yu and Xi
(2008) report quality correlation in manufacturing systems of food, chemicals, and wood products
among others. Finally, Babich et al. (2007) and Yan et al. (2012) also report the existence of
quality correlation. However, they analyze such correlation among lots received from different
suppliers, rather than in one lot, as we do in this paper.