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Quality and Performance

Chapter 5
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05 - 01

What is Quality?
Quality
A term used by
customers to
describe their
general
satisfaction
with a service
or product.
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Costs of Quality
Prevention Costs
Appraisal Costs
Internal Failure Costs
External Failure Costs

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Ethics and Quality


Balancing the traditional
measures of quality performance
and the overall benefits to
society.
Identifying deceptive business
practices.
Developing a culture around
ethics.
Training employees to
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Total Quality
Management
TQM
A
philosophy
that
stresses
principles
for
achieving
high levels

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Customer Satisfaction
Conformance to Specifications
Value
Fitness for Use
Support
Psychological Impressions
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Employee Involvement
Cultural Change
Teams
Employee Empowerment
Problem-solving teams
Special-purpose teams
Self-managed teams

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Continuous Improvement
Kaizen
Problem-solving
tools
PDSA Cycle

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What is Six Sigma?


Six Sigma
A comprehensive and flexible
system for achieving,
sustaining, and maximizing
business success by minimizing
defects and variability in
processes.
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Six Sigma Approach


Process average OK;Process variability OK;
too much variation
process off target
X
X
X

XX
X

Process
on target with
low variability
Reduce
spread

Center
process

X
XX
XX
X XX

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05- 10

X X
X X
X
X XX
X

Six Sigma Improvement


Model
Six Sigma
Certification
Master Black
Belts
Black Belts
Green Belts
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Acceptance Sampling
Acceptance Sampling
The application of statistical techniques

to determine if a quantity of material


from a supplier should be accepted or
rejected based on the inspection or test
of one or more samples.

Acceptable Quality Level


A statement of the proportion of
defective items that the buyer will accept
in a shipment.
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Acceptance Sampling
Interface
Buyer
Manufactur
es furnaces

Fan

Motor
inspection
Yes Accept

motors?

mo

Firm A uses TQM or Six


Sigma to achieve internal
process performance

tor

Supplier uses TQM or Six


Sigma to achieve internal
process performance

Firm A
Manufacturers F
furnace fan motorsan bla
de
s
TARGET: Buyers specs

Supplier
Manufactures
fan blades
TARGET: Firm As specs

No

Blade
inspection
Yes

Accept
blades?

No

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05- 13

Statistical Process
Control (SPC)
SPC
The application of statistical techniques
to determine whether a process is
delivering what the customer wants.
Performance Measurements
Variables - Characteristics that can be
measured.
Attributes - Characteristics that can be
counted.
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Sampling
Sampling Plan
Size of the sample
Time between successive
samples
Decision rules that determine
when action should be taken
Complete Inspection
Inspect each product at each
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Sampling Statistics
Sample Mean

Sample Range

Sum of the
observations
divided by the total
n
observations
xi

i 1
x

where
n

Difference
between the
largest and
smallest
observation in a
sample

xi = observation of a quality characteristic


(such as time)
x
n = total number of observations
= mean
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Sampling Statistics
Standard deviation The square
root of the variance of a
distribution.
An estimate of the process
2
standard deviation based
on
a

i
2
2
x

xi x by: i

sample
is
given
n

or
n 1

n 1

where
= standard deviation of a sample
xi = observation of a quality characteristic
(such as time)
x
n = totalCopyright
number
observations
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= mean

Sampling Statistics
1.The sample mean is the sum of the observations
divided by the total number of observations.
n

x
i 1

= observation of a quality characteristic (such as time


= total number of observations
= mean
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05 - 18

Sampling Statistics
2.The range is the difference between the largest
observation in a sample and the smallest. The
standard deviation is the square root of the
variance of a distribution. An estimate of the
process standard deviation based on a sample is
given by

x x
i

n 1

or

x
2
i

x
i

n 1

where
= standard deviation of a sample
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Sampling Distribution

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Types of Variation
Common cause
Variation that is random,
unidentifiable and unavoidable
Assignable cause
Variation that can be identified
and eliminated
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Effects of Assignable Cause Variation


on the Process Distribution

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Control Charts
Time-ordered diagram used to
determine whether observed
variations are abnormal
Mean
Upper control limit
Lower control limit

Steps for a control chart


1. Random sample
2. Plot statistics
3. Eliminate the cause, incorporate
improvements
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Repeat
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Control Limits and Sampling


Distribution
UCL

Nominal

LCL

Assignabl
e
causes
likely
2

Samples
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Control Charts
Variations

UCL
Nominal
LCL
Sample number

(a) Normal No action


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Control Charts
Variations

UCL
Nominal
LCL
Sample number

(b) Run Take action


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Control Charts
Variations

UCL
Nominal
LCL
Sample number

(c)

Sudden change Monitor


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(d)

Control Charts
Variations

UCL
Nominal
LCL
Sample number

Exceeds control limits Take action


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Control Chart Errors


Type I error
Concluding that a
process is out of
control when it is
in control

Type II error
Concluding that a
process is in control
when it is out of
control

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Control Chart Types


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Variable Control Charts


R-Chart
UCLR = D4R and LCLR = D3R

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Variable Control Charts


UCLx = x + A2R and LCLx = x A2R

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Calculating Control Chart


Factors

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Steps for x- and R-Charts


1. Collect data.
2. Compute the range.
3. Use Table 5.1 to determine R-chart
control limits.
4. Plot the sample ranges. If all are
in control, proceed to step 5.
Otherwise, find the assignable
causes, correct them, and return
to step 1.
5. Calculate x for each sample.
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05- 34

Steps for x- and R-Charts


6. Use Table 5.1 to determine x-chart
control limits
7. Plot the sample means. If all are in
control, the process is in
statistical control. Continue to
take samples and monitor the
process. If any are out of control,
find the assignable causes, correct
them, and return to step 1.
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Example 5.1
The management of West Allis Industries is
concerned about the production of a special
metal screw used by several of the companys
largest customers. The diameter of the screw
is critical to the customers. Data from five
samples appear in the accompanying table.
The sample size is 4. Is the process in
statistical control?

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Example 5.1
Compute the range for each
sample and the control limits
UCLR = D4R =

2.282(0.0021) = 0.00479 in.

LCLR = D3R = 0(0.0021) = 0 in.

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Example 5.1

Process variability is in
statistical
control.
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05- 38

Example 5.1
Compute the mean for each
sample and the control
limits.

0.5027 + 0.729(0.0021) = 0.5042 in.

0.5027 0.729(0.0021) = 0.5012 in.


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Example 5.1

Process average is NOT in


statistical
control.
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05 - 40

An Alternate Form
If the standard deviation of the
process distribution is known,
another form of the x-chart may
be used:

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05 - 41

Example 5.2
For Sunny Dale Bank the time required to
serve customers at the drive-by window is an
important quality factor in competing with
other
banks in the city.

After several weeks of sampling, two


successive samples came in at 3.70 and
3.68 minutes, respectively. Is the
customer service process in statistical
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Example 5.2
For Sunny Dale Bank the time required
to serve customers at the drive-by
window is an important quality factor
in competing with other banks in the

city.

After several weeks of sampling, two


successive samples came in at 3.70 and
3.68 minutes, respectively. Is the customer
service process
inPearson
statistical
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Example 5.2
x

n
z

=
=
=
=

5 minutes
1.5 minutes
6 customers
1.96

The process variability is in statistical


control, so we proceed directly to the xchart. The control limits are
UCLx = x + z/n
5.0 +
= 1.96(1.5)/6 = 6.20 minutes
LCLx = x z/n
5.0 =1.96(1.5)/6 = 3.80 minutes
The new process is an improvement.
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Application 5.1
Webster Chemical Company produces mastics
and caulking for the construction industry. The
product is blended in large mixers and then
pumped into tubes and capped.
Webster is concerned whether the filling process
for tubes of caulking is in statistical control. The
process should be centered on 8 ounces per
tube. Several samples
of eight tubes are taken
Tube Number
and
each
tube
is3 weighed
in ounces.
Sample
1
2
4
5
6
7
8
Avg
Range
1

7.98

8.34

8.02

7.94

8.44

7.68

7.81

8.11

8.040

0.76

8.23

8.12

7.98

8.41

8.31

8.18

7.99

8.06

8.160

0.43

7.89

7.77

7.91

8.04

8.00

7.89

7.93

8.09

7.940

0.32

8.24

8.18

7.83

8.05

7.90

8.16

7.97

8.07

8.050

0.41

7.87

8.13

7.92

7.99

8.10

7.81

8.14

7.88

7.980

0.33

8.13

8.14

8.11

8.13

8.14

8.12

8.13

8.14

8.130

0.03

Avgs
8.050
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0.38

Application 5.1
Assuming that taking only 6 samples is
sufficient, is the process in statistical
control?

1.864(0.38) = 0.708

0.136(0.38) = 0.052

The range chart is out of control since


sample 1 falls outside the UCL and
sample 6 falls outside the LCL.
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05- 46

Application 5.1
Consider dropping sample 6 because
of an inoperative scale, causing
inaccurate measures.
Tube Number
Sample

Avg

Range

7.98

8.34

8.02

7.94

8.44

7.68

7.81

8.11

8.040

0.76

8.23

8.12

7.98

8.41

8.31

8.18

7.99

8.06

8.160

0.43

7.89

7.77

7.91

8.04

8.00

7.89

7.93

8.09

7.940

0.32

8.24

8.18

7.83

8.05

7.90

8.16

7.97

8.07

8.050

0.41

7.87

8.13

7.92

7.99

8.10

7.81

8.14

7.88

7.980

0.33

Avgs

8.034

0.45

What is the conclusion on process


variability
and
process
average?
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Application 5.1

1.864(0.45) = 0.839

0.136(0.45) = 0.061

8.034 + 0.373(0.45) = 8.202

8.034 0.373(0.45) = 7.866

The resulting control charts


indicate that the process is actually
in control.
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Control Charts for


Attributes
p-charts are used to control the proportion
defective
Sampling involves yes/no decisions so the
underlying distribution is the binomial
distribution
The standard deviation
p 1is p / n
p

p = the center line on the chart


and

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Example 5.3
Hometown Bank is concerned
about the number of wrong
customer account numbers
recorded. Each week a
random sample of 2,500
deposits is taken and the
number of incorrect account
numbers is recorded
Using three-sigma control
limits, which will provide a
Type I error of 0.26 percent, is
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Example 5.3
Sample
Number

Wrong Account
Numbers

Sample
Number

Wrong Account
Numbers

15

24

12

19

10

10

17

19

11

15

12

3
Total

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147

05 - 51

Example 5.3
Total defectives
147
=
= 0.0049
p=
Total number of observations
12(2,500)
p =

p(1 p)/n = 0.0049(1 0.0049)/2,500 = 0.0014


UCLp = p + zp = 0.0049 + 3(0.0014) = 0.0091
LCLp = p zp = 0.0049 3(0.0014) = 0.0007

Calculate the sample proportion defective


and plot each sample proportion
defective on the chart.
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Example 5.3
.0091Defective
Fraction

X
X

.0049

UCL

X
Mean

.0007

X
|

X
|

6
7
Sample

10

11

12

LCL

The process is NOT in statistical control.


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Application 5.2

A sticky scale brings Websters attention to


whether caulking tubes are being properly
capped. If a significant proportion of the tubes
arent being sealed, Webster is placing their
customers in a messy situation. Tubes are
packaged in large boxes of 144. Several boxes
are inspected and the following numbers of
leaking
tubes
are found:
Sample
Tubes
Sample
Tubes
Sample
Tubes
1

15

16

10

17

11

18

12

19

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Application 5.2
Calculate the p-chart three-sigma control
limits to assess whether the capping process
is in statistical control.
p

Total number of leaky tubes


72

0.025
Total number of tubes
20 144
p

p1 p

0.025 1 0.025
0.01301
144

UCL p p z p 0.025 3 0.01301 0.06403


LCL p p z p 0.025 3 0.01301 0.01403 0

The process is in control as the p values


for the samples all fall within the control
limits.
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Control Charts for


Attributes
c-charts count the number of defects per
unit of service encounter
The underlying distribution is the Poisson
distribution

UCLc = c + zc
zc

and

LCLc = c

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Example 5.4
The Woodland Paper Company produces
paper for the newspaper industry. As a final
step in the process, the paper passes
through a machine that measures various
product quality characteristics. When the
paper production process is in control, it
averages
defects
per for
roll.the number of
a.
Set up a20
control
chart
defects per roll. For this example, use
two-sigma control limits.
b.Five rolls had the following number of
defects: 16, 21, 17, 22, and 24,
respectively. The sixth roll, using pulp
from a different supplier, had 5 defects.
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production
process
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Example 5.4

he average number of defects per roll is 20. Therefore

= 20 + 2(20) = 28.94

LCLc = c zc = 20 2(20) = 11.06

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Example 5.4
b.

The process is technically out of control due


to Sample 6. However, Sample 6 shows that
the new supplier
isPearson
a good
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Application 5.3

At Webster Chemical, lumps in the caulking


compound could cause difficulties in
dispensing a smooth bead from the tube. Even
when the process is in control, there will still
be an average of 4 lumps per tube of caulk.
Testing for the presence of lumps destroys the
product, so Webster takes random samples.
The following are results of the study:
Tube #

Lumps

Tube #

Lumps

Tube #

Lumps

10

11

12

Determine the c-chart two-sigma upper


and lower control limits for this process.
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Application Problem 5.3


c

6 5 0 4 6 4 1 6 5 0 9 2
4
12

c
UCL c c z c

4 2
4 2 2 8

LCL c c z c 4 2 2 0

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Process Capability
Process Capability The ability
of the process to meet the
design specification for a service
or product
Nominal Value
Tolerance

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Process Capability
Nominal
value
Process distribution
Lower
specification

20

Upper
specification

25

30

(a) Process is capable


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Minutes

Process Capability
Nominal
value
Process distribution
Upper
specification

Lower
specification

20

25

30

(b) Process is not capable


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Minutes

Process Capability
Nominal value
Six sigma
Four sigma
Two sigma
Upper
specification

Lower
specification

Mean
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Process Capability Index


Measures how well a process is
centered and whether the
variability is acceptable
Cpk = Minimum of

x Lower specification Upper specification x


,
3
3

where
= standard deviation of the process distribution

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Process Capability Ratio


A test to see if the process
variability is capable of
producing output within a
products specifications.
Upper specification Lower specification
Cp =
6

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Example 5.5
The intensive care
Upper
unit lab process has
specification =
an average
30 minutes
turnaround time of
Lower
26.2 minutes and a
standard deviation
specification
of 1.35 minutes.
20 minutes
The nominal value
Average service
for this service is 25
26.2 minutes
minutes + 5
=
minutes.
1.35 minutes
Is the lab process
capable of
four
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sigma-level

Example 5.5

= Minimum of

Cpk = Minimum of 26.2 20 , 30


26.2
3 ( 1.53)
3( 1.53)
Cpk = Minimum of
1.53, 0.94
Cpk = 0.94
Process does not meets 4-sigma
level of 1.33
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Example 5.5
Cp = Upper Specification Lower
Specification
6
Cp = 30 20 = 1.23
6 (1.35)
Process did not meet 4-sigma level of
1.33
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Example 5.5
New Data is
collected:
Upper specification
=
30 minutes

Lower specification

Cp = Upper Lower
6
Cp = 30 20 =
1.39
6 (1.20)

20 minutes

Average service
26.1 minutes

= 1.20 minutes

Process meets 4sigma level of 1.33


for variability

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Example 5.5

Upper specification
x
Minimum of x Lower specification
,
3
3
Cpk = Minimum of 26.1 20 ,
30 26.1
3 ( 1.20)
3
Cp =
( 1.20)
1.08

Process does not meets 4-sigma


level of 1.33
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Application 5.4
Webster Chemicals nominal weight
for filling tubes of caulk is 8.00
ounces 0.60 ounces. The target
process capability ratio is 1.33,
signifying that management wants
4-sigma performance. The current
distribution of the filling process is
centered on 8.054 ounces with a
standard deviation of 0.192ounces.
Compute the process capability
index and process capability ratio to
assess whether the filling process is
capable and set properly.
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Application 5.4
a. Process capability index:
Cpk = Minimum of

= Minimum of

x Lower specification Upper specification x


,
3
3
8.600 8.054
8.054 7.400
= 1.135,
= 0.948
3(0.192)
3(0.192)

The value of 0.948 is far below the


target of 1.33. Therefore, we can
conclude that the process is not
capable.
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Application 5.4
b.Process capability ratio:
Upper specification Lower specification
8.60 7.40
Cp =
=
= 1.0417
6
6(0.192)

The value of Cp is less than the target for


four-sigma quality.
Therefore we conclude that the process
variability must be addressed first, and then
the process should be retested.
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Loss (dollars)

Quality Loss Function

Lower
Nominal
Upper
specification
value
specification

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International Quality
Documentation Standards
ISO 9001:2008 Quality
Standards
ISO 14000:2004 Environmental
Management Standards
ISO 26000:2010 Social
Responsibility Guidelines
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Baldridge Performance
Excellence Program

Leadership
Strategic Planning
Customer Focus
Measurement, Analysis, and
Knowledge Management
Workforce Focus
Operations Focus
Results
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Solved Problem 1
The Watson Electric Company produces incandescent light
bulbs. The following data on the number of lumens for 40-watt
light bulbs were collected when the process was in control.

Observation
Sample

604

612

588

600

597

601

607

603

581

570

585

592

620

605

595

588

590

614

608

604

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Solved Problem 1

604 + 612 + 588 + 600


= 601
x=
4
R=
612 588 = 24
Sample

601

24

602

10

582

22

602

32

604

24

Total

2,991
x = 598.2

112
R = 22.4

Average
05 - 80
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Hall.

Solved Problem 1
The R-chart control
limits are

2.282(22.4) = 51.12
0(22.4) = 0

The x-chart control limits


are

598.2 + 0.729(22.4) = 614.53

598.2 0.729(22.4) = 581.87

b. First check to see whether the variability is


still in control based on the new data. The
range is 53 (or 623 570), which is outside
the UCL for the R-chart. Since the process
variability is out of control, it is meaningless
to test for the process average using the
Copyright 2013 Pearson Education, Inc. Publishing as
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current
estimate
for R. A search for05assignable
Prentice
Hall.

Solved Problem 2
The data processing department
of the Arizona Bank has five data
entry clerks. Each working day
their supervisor verifies the
accuracy of a random sample of
250 records. A record containing
one or more errors is considered
defective and must be redone.
The results of the last 30
samples are shown in the table.
All were checked to make sure
Copyright 2013 Pearson Education, Inc. Publishing as
05 - 82
Prentice Hall.

Solved Problem 2
Sample

Number of Defective
Records

Sample

Number of Defective
Records

16

17

12

19

18

10

19

11

20

11

21

17

12

22

12

23

24

10

13

25

13

Copyright 2013 Pearson Education, Inc. Publishing as Prentice


05 -10
83
11
18
26
Hall.

Solved Problem 2
a. Based on these historical data, set
up a p-chart using z = 3.
b. Samples for the next four days
showed the following:
Sample

Number of Defective Records

Tues

17

Wed

15

Thurs

22

Fri

21

What is the supervisors assessment


of the data-entry process likely to
be? Copyright 2013 Pearson Education, Inc. Publishing as Prentice Hall.
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Solved Problem 2
SOLUTION
a. From the table, the supervisor knows that
the total number of defective records is 300
out of a total sample of 7,500 [or 30(250)].
Therefore, the central line of the chart is
300
p=
= 0.04
7,500
The control limits are
UCL p p z

p 1 p
0.04(0.96)
0.04 3
0.077
n
250

p 1 p 0.04 3 0.04(0.96) 0.003


LCL p p z
250
n
Copyright 2013 Pearson Education, Inc. Publishing as
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Solved Problem 2
b. Samples for the next four days showed the
following:
Number of Defective
Records

Proportion

Tues

17

0.068

Wed

15

0.060

Thurs

22

0.088

Fri

21

0.084

Sample

Samples for Thursday and Friday are out of


control. The supervisor should look for the
problem and, upon identifying it, take
corrective action.
Copyright 2013 Pearson Education, Inc. Publishing as
Prentice Hall.
05 - 86

Solved Problem 3
The Minnow County Highway Safety
Department monitors accidents at the
intersection of Routes 123 and 14.
Accidents at the intersection have
averaged three per month.
a. Which type of control chart should
be used? Construct a control chart
with three sigma control limits.
b. Last month, seven accidents
occurred at the intersection. Is this
sufficient evidence to justify a claim
that something has changed at the
Copyright 2013 Pearson Education, Inc. Publishing as
intersection?
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Solved Problem 3
SOLUTION
a. The safety department cannot determine the
number of accidents that did not occur, so it
has no way to compute a proportion defective
at the intersection. Therefore, the
administrators must use a c-chart for which
UCLc =

LCLc =

c+ =
z 3
c +3

3 = 8.20

c =
z 3
c 3

3 = 2.196

There cannot be a negative number of


accidents, so the LCL in this case is adjusted to
zero.
b. The number of accidents last month falls
within the UCL and LCL of the chart. We
conclude that no assignable causes are
present
and
that
increase
Copyright
2013
Pearsonthe
Education,
Inc. Publishing in
as accidents
Prentice Hall.
was due
to chance.
05 - 88

Solved Problem 4
Pioneer Chicken advertises lite
chicken with 30 percent fewer
calories. (The pieces are 33 percent
smaller.) The process average
distribution for lite chicken breasts
is 420 calories, with a standard
deviation of the population of 25
calories.
Pioneer
randomly
takes
a.
Design an
x-chart using
the process
standard
deviation.
samples
of
six
chicken
to
b.The
product
design
calls breasts
for the average
chicken breast
to content.
contain 400 100
measure
calorie
calories. Calculate the process capability
index (target = 1.33) and the process
Copyright 2013 Pearson Education, Inc. Publishing as
capability
ratio. Interpret the results.
Prentice Hall.
05 - 89

Solved Problem 4
SOLUTION
a. For the process standard deviation of 25
calories, the standard deviation of the sample
mean is

25
10.2 calories
6

420 + 3(10.2) = 450.6 calories

420 3(10.2) = 389.4 calories

Copyright 2013 Pearson Education, Inc. Publishing as


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Solved Problem 4
b. The process capability index is
Cpk = Minimum of
= Minimum of

500 420
420 300
= 1.60,
3(25)
3(25)

,
= 1.07

The process capability ratio is


Upper specification Lower specification
Cp =
=
6

500
300
6(25)

= 1.33

Because the process capability ratio is 1.33, the


process should be able to produce the product
reliably within specifications. However, the process
capability index is 1.07, so the current process is not
centered properly for four-sigma performance. The
Copyright
2013 Pearson
Education, Inc. Publishing
as close to the
mean of the
process
distribution
is
too
05 - 91
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upper specification.

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reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise,
without the prior written permission of the publisher.
Printed in the United States of America.
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Prentice Hall.

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