Slides prepared

by John Loucks

 2002 South-Western/Thomson Learning TM 1 1

 Chapter 17

Quality Control

2
 Overview

● Introduction
● Statistical Concepts in Quality Control
● Control Charts
● Acceptance Plans
● Computers in Quality Control
● Quality Control in Services
● Wrap-Up: What World-Class Companies Do

3
 Introduction

● Quality control (QC) includes the activities from the

suppliers, through production, and to the customers.
● Incoming materials are examined to make sure they
meet the appropriate specifications.
● The quality of partially completed products are
analyzed to determine if production processes are
functioning properly.
● Finished goods and services are studied to determine
if they meet customer expectations.

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 QC Throughout Production Systems

Inputs Conversion Outputs

Raw Materials,
Production Products and
Parts, and
Processes Services
Supplies

Control Charts Control Charts

and Control Charts and
Acceptance Tests Acceptance Tests

Quality of Quality of Quality of

Inputs Partially Completed Outputs
Products

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 Services and Their Customer Expectations

● Hospital
●
Patient receive the correct treatments?
●
Patient treated courteously by all personnel?
●
Hospital environment support patient recovery?
● Bank
●
Customer’s transactions completed with precision?
●
Bank comply with government regulations?
●
Customer’s statements accurate?

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 Products and Their Customer Expectations

● Automaker
●
Auto have the intended durability?
●
Parts within the manufacturing tolerances?
●
Auto’s appearance pleasing?
● Lumber mill
●
Lumber within moisture content tolerances?
●
Lumber properly graded?
●
Knotholes, splits, and other defects excessive?

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 Sampling

● The flow of products is broken into discrete batches

called lots.
● Random samples are removed from these lots and
measured against certain standards.
● A random sample is one in which each unit in the lot
has an equal chance of being included in the sample.
● If a sample is random, it is likely to be representative
of the lot.

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 Sampling

● Either attributes or variables can be measured and

compared to standards.
● Attributes are characteristics that are classified into
one of two categories, usually defective (not meeting
specifications) or nondefective (meeting
specifications).
● Variables are characteristics that can be measured on
a continuous scale (weight, length, etc.).

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 Size and Frequency of Samples

● As the percentage of lots in samples is increased:

●
the sampling and sampling costs increase, and
●
the quality of products going to customers increases.
● Typically, very large samples are too costly.
● Extremely small samples might suffer from statistical
imprecision.
● Larger samples are ordinarily used when sampling for
attributes than for variables.

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 When to Inspect
During the Production Process
● Inspect before costly operations.
● Inspect before operations that are likely to produce
faulty items.
● Inspect before operations that cover up defects.
● Inspect before assembly operations that cannot be
undone.
● On automatic machines, inspect first and last pieces
of production runs, but few in-between pieces.
● Inspect finished products.

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 Central Limit Theorem

● The central limit theorem is: Sampling distributions

can be assumed to be normally distributed even
though the population (lot) distributions are not
normal.
● The theorem allows use of the normal distribution to
easily set limits for control charts and acceptance
plans for both attributes and variables.

12
 Sampling Distributions

● The sampling distribution can be assumed to be normally distributed

unless sample size (n) is extremely small.
● The mean of the sampling distribution ( x ) is equal to the population
mean (µ ).
=
● The standard error of the sampling distribution (σ x ) is smaller than
the population standard deviation (σ x ) by a factor of 1/

13
Population and Sampling Distributions

f(x) Population Distribution

Mean = µ
Std. Dev. = σ x

x
Sampling Distribution
f(x)
of Sample Means
Mean = x== µ
σx
Std. Error = σ x =
n
x
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 Control Charts

● Primary purpose of control charts is to indicate at a

glance when production processes might have
changed sufficiently to affect product quality.
● If the indication is that product quality has
deteriorated, or is likely to, then corrective is taken.
● If the indication is that product quality is better than
expected, then it is important to find out why so that
it can be maintained.
● Use of control charts is often referred to as statistical
process control (SPC).
15
 Constructing Control Charts

● Vertical axis provides the scale for the sample

information that is plotted on the chart.
● Horizontal axis is the time scale.
● Horizontal center line is ideally determined from
observing the capability of the process.
● Two additional horizontal lines, the lower and upper
control limits, typically are 3 standard deviations
below and above, respectively, the center line.

16
 Constructing Control Charts

● If the sample information falls within the lower and

upper control limits, the quality of the population is
considered to be in control; otherwise quality is
judged to be out of control and corrective action
should be considered.
● Two versions of control charts will be examined
●
Control charts for attributes
●
Control charts for variables

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 Control Charts for Attributes

● Inspection of the units in the sample is performed on

an attribute (defective/non-defective) basis.
● Information provided from inspecting a sample of
size n is the percent defective in a sample, p, or the
number of units found to be defective in that sample
divided by n.

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 Control Charts for Attributes

● Although the distribution of sample information

follows a binomial distribution, that distribution can
be approximated by a normal distribution with a
●
mean of p-
●
standard deviation of p(100 − p)/n
● The 3σ control limits are

p + / - 3 p(100 − p)/n

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 Example: Attribute Control Chart

Every check cashed or deposited at Lincoln Bank

must be encoded with the amount of the check before
it can begin the Federal Reserve clearing process.
The accuracy of the check encoding process is of
upmost importance. If there is any discrepancy
between the amount a check is made out for and the
encoded amount, the check is defective.

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 Example: Attribute Control Chart

Twenty samples, each consisting of 250 checks,

were selected and examined. The number of
defective checks found in each sample is shown
below.
4 1 5 3 2 7 4 5 2 3
2 8 5 3 6 4 2 5 3 6

21
 Example: Attribute Control Chart

The manager of the check encoding department

knows from past experience that when the encoding
process is in control, an average of 1.6% of the
encoded checks are defective.
She wants to construct a p chart with 3-standard
deviation control limits.

22
 Example: Attribute Control Chart

p(1− p) .016(1− .016) .015744

σp = = = =
.007936
n 250 250
UCL = p + 3σ p =.016+3(.007936)= .039808 or 3.98
%
LCL = p − 3σ p=.016-3(.007936)=-.007808= 0%

23
 Example: Attribute Control Chart

p Chart for Lincoln Bank

0.045
0.040
0.035
Sample Proportion p

0.030
0.025
0.020
0.015
0.010
0.005
0.000
0 5 10 15 20
Sample Number

24
 Control Charts for Variables

● Inspection of the units in the sample is performed on

a variable basis.
● The information provided from inspecting a sample
of size n is:
●
Sample mean, x, or the sum of measurement of
each unit in the sample divided by n
●
Range, R, of measurements within the sample, or
the highest measurement in the sample minus the
lowest measurement in the sample

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 Control Charts for Variables

● In this case two separate control charts are used to

monitor two different aspects of the process’s output:
●
Central tendency
●
Variability
● Central tendency of the output is monitored using the
x-chart.
● Variability of the output is monitored using the R-
chart.

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 x-Chart

● The central line is =

x, the sum of a number of sample
means collected while the process was considered to
be “in control” divided by the number of samples.
● The 3σ lower control limit is=x - AR
● The 3σ upper control limit is=x + AR
● Factor A is based on sample size.

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 R-Chart

● The central line is R, the sum of a number of sample

ranges collected while the process was considered to be
“in control” divided by the number of samples.
● The 3σ lower control limit is D1R.
● The 3σ upper control limit is D2R.
● Factors D1and D2 are based on sample size.

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3σ Control Chart Factors for Variables

Control Limit Factor Control Limit Factor

Sample for Sample Mean for Sample Range
Size n A D1 D2
2 1.880 0 3.267
3 1.023 0 2.575
4 0.729 0 2.282
5 0.577 0 2.116
10 0.308 0.223 1.777
15 0.223 0.348 1.652
20 0.180 0.414 1.586
25 0.153 0.459 1.541
Over 25 0.75(1/ n ) 0.45+.001n 1.55-.0015n
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 Example: Variable Control Chart

Harry Coates wants to construct x and R charts at

the bag-filling operation for Meow Chow cat food.
He has determined that when the filling operation is
functioning correctly, bags of cat food average 50.01
pounds and regularly-taken 5-bag samples have an
average range of .322 pounds.

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 Example: Variable Control Chart

● Sample Mean Chart

=
x = 50.01, R = .322, n = 5

UCL = x=+ AR = 50.01 + .577(.322) = 50.196

=
LCL = x - AR = 50.01 - .577(.322) = 49.824

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 Example: Variable Control Chart

x Chart for Meow Chow

50.3
UCL
50.2
50.1
Sample
Mean

50.0
49.9
49.8 LCL
49.7
0 5 10 15 20
Sample Number

32
 Example: Variable Control Chart

● Sample Range Chart

=
x = 50.01, R = .322, n = 5
UCL = RD2 = .322(2.116) = .681
LCL = RD1 = .322(0) = 0

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 Example: Variable Control Chart

A B C D E F
R Chart for Meow Chow
0.80
0.70
Sample Range R

UCL
0.60
0.50
0.40
0.30
0.20
0.10
LCL
0.00
0 5 10 15 20
Sample Number

34
 Acceptance Plans

● Trend today is toward developing testing methods

that are so quick, effective, and inexpensive that
products are submitted to 100% inspection/testing
● Every product shipped to customers is inspected and
tested to determine if it meets customer expectations
● But there are situations where this is either
impractical, impossible or uneconomical
●
Destructive tests, where no products survive test
● In these situations, acceptance plans are sensible

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 Acceptance Plans

● An acceptance plan is the overall scheme for either

accepting or rejecting a lot based on information
gained from samples.
● The acceptance plan identifies the:
●
Size of samples, n
●
Type of samples
●
Decision criterion, c, used to either accept or reject
the lot
● Samples may be either single, double, or sequential.

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 Single-Sampling Plan

● Acceptance or rejection decision is made after

drawing only one sample from the lot.
● If the number of defectives, c’, does not exceed the
acceptance criteria, c, the lot is accepted.

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 Single-Sampling Plan

Lot of N Items

Random
Sample of
N - n Items n Items

c’ Defectives
Inspect n Items
Found in Sample
Replace
c’ > c c’ < c Defectives

n Nondefectives
Reject Lot Accept Lot

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 Double-Sampling Plan

● One small sample is drawn initially.

● If the number of defectives is less than or equal to
some lower limit, the lot is accepted.
● If the number of defectives is greater than some upper
limit, the lot is rejected.
● If the number of defectives is neither, a second larger
sample is drawn.
● Lot is either accepted or rejected on the basis of the
information from both of the samples.

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 Double-Sampling Plan

Lot of N Items
Random
Sample of
N – n1 Items n1 Items
Replace
c1’ Defectives Defectives
Inspect n1 Items
Found in Sample
n1 Nondefectives
c1’ > c2 c1’ < c1
Accept Lot
c1 < c1’ < c2
Reject Lot
Continue (to next slide)
40
 Double-Sampling Plan

Continue (from previous slide)

N – n1 Items

Random
N – (n1 + n2) Sample of
Items n2 Items
Replace
c2’ Defectives Defectives
Reject Lot Inspect n2 Items
Found in Sample
n2 Nondefectives
(c1’ + c2’) > c2
(c1’ + c2’) < c2
Accept Lot
41
 Sequential-Sampling Plan

● Units are randomly selected from the lot and tested

one by one.
● After each one has been tested, a reject, accept, or
continue-sampling decision is made.
● Sampling process continues until the lot is accepted
or rejected.

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 Sequential-Sampling Plan
Number of Defectives
7

6
Reject Lot
5

4
Continue Sampling
3

1 Accept Lot
0
0 10 20 30 40 50 60 70 80 90 100 110 120 130
Units Sampled (n)
43
 Definitions

● Acceptance plan - Sample size (n) and maximum

number of defectives (c) that can be found in a
sample to accept a lot
● Acceptable quality level (AQL) - If a lot has no more
than AQL percent defectives, it is considered a good
lot
● Lot tolerance percent defective (LTPD) - If a lot has
greater than LTPD, it is considered a bad lot

44
 Definitions

● Average outgoing quality (AOQ) – Given the actual

% of defectives in lots and a particular sampling plan,
the AOQ is the average % defectives in lots leaving
an inspection station
● Average outgoing quality limit (AOQL) – Given a
particular sampling plan, the AOQL is the maximum
AOQ that can occur as the actual % defectives in lots
varies

45
 Definitions

● Type I error - Based on sample information, a good

(quality) population is rejected
● Type II error - Based on sample information, a bad
(quality) population is accepted
● Producer’s risk (α ) - For a particular sampling plan,
the probability that a Type I error will be committed
● Consumer’s risk (β ) - For a particular sampling plan,
the probability that a Type II error will be committed

46
 Considerations in
Selecting a Sampling Plan
● Operating characteristics (OC) curve
● Average outgoing quality (AOQ) curve

47
 Operating Characteristic (OC) Curve

● An OC curve shows how well a particular sampling

plan (n,c) discriminates between good and bad lots.
● The vertical axis is the probability of accepting a lot
for a plan.
● The horizontal axis is the actual percent defective in
an incoming lot.
● For a given sampling plan, points for the OC curve
can be developed using the Poisson probability
distribution

48
Probability of Accepting the Lot
Operating Characteristic (OC) Curve
1.00
.90 n = 15, c = 0
.80
.70
.60 Producer’s Risk (α ) = 3.67%
.50 Consumer’s Risk (β ) = 8.74%
.40
AQL = 3%
.30
LTPD = 15%
.20
.10
% Defectives
in Lots
0 5 10 15 20 25
49
 OC Curve (continued)

● Management may want to:

●
Specify the performance of the sampling procedure
by identifying two points on the graph:
●
AQL and α
●
LTPD and β
●
Then find the combination of n and c that provides
a curve that passes through both points

50
 Average Outgoing Quality (AOQ) Curve

● AOQ curve shows information depicted on the OC

curve in a different form.
● Horizontal axis is the same as the horizontal axis for
the OC curve (percent defective in a lot).
● Vertical axis is the average quality that will leave the
quality control procedure for a particular sampling
plan.
● Average quality is calculated based on the assumption
that lots that are rejected are 100% inspected before
entering the production system.

51
 AOQ Curve

● Under this assumption,

AOQ = π [P(A)]/1
where: π = percent defective in an incoming lot
P(A) = probability of accepting a lot is
obtained from the plan’s OC curve
● As the percent defective in a lot increases, AOQ will
increase to a point and then decrease.

52
 AOQ Curve

● AOQ value where the maximum is attained is referred

to as the average outgoing quality level (AOQL).
● AOQL is the worst average quality that will exit the
quality control procedure using the sampling plan n
and c.

53
 Computers in Quality Control

● Records about quality testing and results limit a firm’s

exposure in the event of a product liability suit.
● Recall programs require that manufacturers
●
Know the lot number of the parts that are responsible
for the potential defects
●
Have an information storage system that can tie the
lot numbers of the suspected parts to the final
product model numbers
●
Have an information system that can track the model
numbers of final products to customers

54
 Computers in Quality Control

● With automation, inspection and testing can be so

inexpensive and quick that companies may be able to
increase sample sizes and the frequency of samples,
thus attaining more precision in both control charts
and acceptance plans

55
 Quality Control in Services

● In all services there is a continuing need to monitor

quality
● Control charts are used extensively in services to
monitor and control their quality levels

56
 Wrap-Up: World-Class Practice

● Quality cannot be inspected into products. Processes

must be operated to achieve quality conformance;
quality control is used to achieve this.
● Statistical control charts are used extensively to
provide feedback to everyone about quality
performance
● . . . more

57
 Wrap-Up: World-Class Practice

● Where 100% inspection and testing are impractical,

uneconomical, or impossible, acceptance plans may
be used to determine if lots of products are likely to
meet customer expectations.
● The trend is toward 100% inspection and testing;
automated inspection and testing has made such an
approach effective and economical.

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End
End of
of Chapter
Chapter 17
17

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