The Taguchi parameter design method has been recognized as an important tool for improving the quality of a product or a process. However, the statistical methods and optimization procedures proposed by Taguchi have much room for improvement. For instance, the two-step procedure proposed by Taguchi may fail to identify an optimum design condition if an adjustment parameter does not exist, the optimal setting of a design parameter is determined only among the levels included in the parameter design experiment, and, for the dynamic parameter design, the signal parameter is assumed to follow a uniform rather than a general distribution. This paper develops an artificial neural network based dynamic parameter design approach to overcome the shortcomings of the Taguchi and existing alternative approaches. First, an artificial neural network is trained to map the relationship between the characteristic, design, noise and signal parameters. Second, Latin hypercube samples of the signal and noise parameters are obtained and used to estimate the slope between the signal parameter and characteristic as well as the variance of the characteristic at each set of design parameter settings. Then, the dynamic parameter design problem is formulated as a nonlinear optimization problem and solved to find the optimal settings of the design parameters using sequential quadratic programming. The effectiveness of the proposed approach is illustrated with an example. (C) 2010 Elsevier Ltd. All rights reserved.