Quality and Performance

Chapter 3

Part 2: SPC

Acceptance Sampling
 The application of statistical techniques to determine
whether a quantity of material should be accepted
or rejected based on the inspection or test of a
sample
 Acceptable Quality Level (AQL): the proportion of
defective items that are acceptable to the buyer
 Less expensive to test a sample, rather than all of
the items
 Risk: the sample may not be representative of the
batch

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Acceptance Sampling Procedure

1. Take a random sample from a large quantity of
items, and test the sample for various quality
measures
2. Accept the batch if the number of defects in the
sample is below a threshold value
3. If the sample does not pass:

1. Inspect all items in the batch, repair or

replace defectives, OR
2. Return the entire batch to the supplier

Acceptance sampling is one way to ensure quality in the supply chain

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 Notice how the buyer’s
specifications become the
supplier’s targets.

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Statistical Process Control (SPC)

 Statistical process control is the application of
statistical techniques to determine whether a
process is delivering what the customer wants.

 SPC measures changes in a process by analyzing a

sample of the output
 SPC can answer the following questions:
 Does output conform to design?
 Is there systematic deviation?
 Can we identify and eliminate the causes of variation?

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Performance Measures

 Variables: Service or product characteristics that can

be measured, such as weight, length, volume, or
time.
 Length of time to deliver a package
 Diameter of a piston
 Weight of a box of cereal

 Attributes: Service or product characteristics that

can be counted.
 Number of late deliveries
 Number of defective pistons
 Number of cereal boxes that are under the
required weight
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 Sampling
 Sampling plan: A plan that specifies a
sample size, the time between
successive samples, and decision rules
that determine when action should be
taken.

 Sample size: A quantity of randomly

selected observations of process
outputs.
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Sample Means and

the Process Distribution
Sample statistics have their own distribution, which
we call a sampling distribution.

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Sampling Distributions
The sample mean is the sum of the observations divided
by the total number of observations

where

xi = observation of a quality characteristic (such as time)

n = total number of observations
= mean

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 Sampling Distributions
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

where
σ = standard deviation of a sample
xi = observation of a quality characteristic (such as time)
n = total number of observations
= mean 10/34

Process Distributions
o A process distribution can be characterized by its
location, spread, and shape.
o Location is measured by the mean of the
distribution and spread is measured by the range or
standard deviation.
o The shape of process distributions can be
characterized as either symmetric or skewed.
o A symmetric distribution has the same number of
observations above and below the mean.
o A skewed distribution has a greater number of
observations either above or below the mean. 11/34

Causes of Variation
 Common causes: random and unavoidable.
Tool imprecision
Weather conditions
Traffic congestion

 Assignable causes: can be identified and

eliminated.
Tool wear
Machine out of calibration
Human error

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Common Causes of Variation

 Random and unavoidable

 Consider the distribution of observations
 Mean

 Spread: dispersion about the mean

 Range: difference between largest

and smallest observation
 Standard deviation
 Shape

 Symmetric

 Skewed 13/34

Common Causes
Standard Deviation/
Mean Spread

This is variation that

we accept as
unavoidable.

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Assignable Causes of Variation

 Can be identified and eliminated.

 Process is “out of control” when there

are assignable causes of variation that
have not been eliminated.

 This is variation that we can do

something about!
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Performance Measures
 Variables: measurable product characteristics
 Product: physical measurements
 Service: time
 Precise information about problem
 May be difficult to collect and analyze
 Examples include size of table legs; length of delivery time

 Attributes: countable product characteristics

 Number of defects
 Proportion of defective products
 Easier to collect, provide less information
 Examples include number of defective table legs; number of
late deliveries

Consider the tradeoff between the cost of finding/avoiding quality

problems and the cost of not achieving quality.
Often both performance measures are used.
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How much data do we need?

 Consider costs of inspection vs. costs of
failure.

 Complete inspection is advisable when the

cost of failure is very high

 Nuclear fuel tubes

 Pacemakers

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Decisions about SPC

 What are the managerial decisions
involved in using Statistical Process
Control?

 For a brief discussion of some of these

issues, click here.

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Control Charts
 Show distribution of observations in relation
to target and limits.
 Center line = target value.
 UCL = upper control limit
 LCL = lower control limit
 Process is in control if observations from a
random sample fall between the two limits.

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Using Control Charts for

Process Improvement
1. Take a random sample and measure the
process

2. Plot statistics: when problems are indicated,

seek the assignable cause

3. Eliminate the cause if it is a problem,

incorporate the cause it is an improvement

4. Repeat the cycle periodically

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 Possible Errors
 Type I: random error is considered due to assignable
causes.

 Type II: out-of-control process is considered in control.

 Trade-off between these two types of errors and amount

of data, control limits.

 Decisions about control limits:

tighter limits  more expensive to control

 Depends on costs of control vs. costs of failure.

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