5

Quality And Performance

PowerPoint Slides
by Jeff Heyl

For Operations Management, 9e by

Krajewski/Ritzman/Malhotra
2010 Pearson Education

51

Costs of Quality
A failure to satisfy a customer is
considered a defect
Prevention costs
Appraisal costs
Internal failure costs
External failure costs
Ethics and quality

52

Total Quality Management

Customer
satisfaction

Figure 5.1 TQM Wheel

53

Total Quality Management

Customer satisfaction
Conformance

to specifications

Value
Fitness

for use

Support
Psychological

impressions

Employee involvement
Cultural

change

Teams

54

Total Quality Management

Continuous improvement
Kaizen
A

philosophy

Not

unique to quality

Problem

solving process

55

The Deming Wheel

Plan

Act

Do

Study
Figure 5.2 Plan-Do-Study-Act Cycle
56

Six Sigma
Process average OK;
too much variation

Process variability OK;

process off target

X
X
X

X X
X X
XX XX
X

X X
X

Reduce
spread

Process
on target with
low variability

Center
process

X
XX
X
X
X XX

Figure 5.3 Six-Sigma Approach Focuses on Reducing Spread and Centering the Process
57

Six Sigma Improvement Model

Define

Measure

Analyze

Improve

Control
Figure 5.4 Six Sigma Improvement Model
58

Acceptance Sampling
Application of statistical techniques
Acceptable quality level (AQL)
Linked through supply chains

59

Acceptance Sampling
Firm A uses TQM or Six
Sigma to achieve internal
process performance

Buyer
Manufactures
furnaces

fan

Motor inspection

Yes

Accept
motors?

mo
to

rs

Firm A
Manufacturers
furnace fan motors
TARGET: Buyers specs

Supplier uses TQM or Six

Sigma to achieve internal
process performance
fan

bla

des

No
Blade inspection

Yes

Accept
blades?

Supplier
Manufactures
fan blades
TARGET: Firm As specs

No

Figure 5.5 Interface of Acceptance Sampling and Process

Performance Approaches in a Supply Chain
5 10

Statistical Process Control

Used to detect process change
Variation of outputs
Performance measurement variables
Performance measurement attributes
Sampling
Sampling distributions

5 11

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

x
i 1

where
xi
n
x

= observation of a quality characteristic (such as tim

= total number of observations
= mean

5 12

Sampling Distributions
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

2
x
i

n 1

where

= standard deviation of a sample

5 13

Sample and Process Distributions

Mean

Distribution of
sample means

Process
distribution

25

Time

Figure 5.6 Relationship Between the Distribution of Sample

Means and the Process Distribution
5 14

Causes of Variation
Common causes
Random,

unavoidable sources of variation

Location
Spread
Shape

Assignable causes
Can

be identified and eliminated

Change
Used

in the mean, spread, or shape

after a process is in statistical control

5 15

Assignable Causes
Average

(a) Location

Time

Figure 5.7 Effects of Assignable Causes on the Process

Distribution for the Lab Analysis Process
5 16

Assignable Causes
Average

(b) Spread

Time

Figure 5.7 Effects of Assignable Causes on the Process

Distribution for the Lab Analysis Process
5 17

Assignable Causes
Average

(c) Shape

Time

Figure 5.7 Effects of Assignable Causes on the Process

Distribution for the Lab Analysis Process
5 18

Control Charts
Time-ordered diagram of process
performance

Mean

Upper control limit

Lower control limit

Steps for a control chart

1. Random sample
2. Plot statistics
3. Eliminate the cause, incorporate improvements
4. Repeat the procedure
5 19

Control Charts
UCL

Nominal

LCL

Assignable
causes likely
1

Samples
Figure 5.8 How Control Limits Relate to the Sampling
Distribution: Observations from Three Samples
5 20

Control Charts

Variations

UCL
Nominal
LCL

Sample number
(a) Normal No action
Figure 5.9 Control Chart Examples
5 21

Control Charts

Variations

UCL
Nominal
LCL

Sample number
(b) Run Take action
Figure 5.9 Control Chart Examples
5 22

Control Charts

Variations

UCL
Nominal
LCL

Sample number
(c) Sudden change Monitor
Figure 5.9 Control Chart Examples
5 23

Control Charts

Variations

UCL
Nominal
LCL

Sample number
(d) Exceeds control limits Take action
Figure 5.9 Control Chart Examples
5 24

Control Charts
Two types of error are possible with control
charts
A type I error occurs when a process is
thought to be out of control when in fact it
is not
A type II error occurs when a process is
thought to be in control when it is actually
out of statistical control
These errors can be controlled by the
choice of control limits
5 25

SPC Methods
Control charts for variables
R-Chart

UCLR = D4R and LCLR = D3R

where
R =
average of several past R values and
the central line of the control chart
D3, D4
=
constants that provide three
standard deviation (three-sigma) limits for the
given sample size

5 26

Control Chart Factors

TABLE 5.1
Size of
Sample (n)

|
|

FACTORS FOR CALCULATING THREE-SIGMA LIMITS FOR

THE x-CHART AND R-CHART
Factor for UCL and
LCL for x-Chart (A2)

Factor for LCL for

R-Chart (D3)

Factor for UCL for RChart (D4)

1.880

3.267

1.023

2.575

0.729

2.282

0.577

2.115

0.483

2.004

0.419

0.076

1.924

0.373

0.136

1.864

0.337

0.184

1.816

10

0.308

0.223

1.777

5 27

SPC Methods
Control charts for variables

x-Chart
UCLx = x + A2R and LCLx = x A2R

where
x =
central line of the chart, which can
be either the average of past sample means or
a target value set for the process
A2 =
constant to provide three-sigma
limits for the sample mean

5 28

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

5 29

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. If no
assignable causes are found, assume
out-of-control points represent common
causes of variation and continue to
monitor the process.
5 30

Using x- and R-Charts

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?
SOLUTION
Step 1: For simplicity, we use only 5 samples. In practice,
more than 20 samples would be desirable. The data
are shown in the following table.

5 31

Using x- and R-Charts

Data for the x- and R-Charts: Observation of Screw Diameter (in.)
Observation
Sample
Number

0.5014

0.5022

0.5009

0.5027

0.0018

0.5018

0.5021

0.5041

0.5024

0.5020

0.0021

0.5027

0.5018

0.5026

0.5035

0.5023

0.0017

0.5026

0.5008

0.5034

0.5024

0.5015

0.0026

0.5020

0.5041

0.5056

0.5034

0.5047

0.0022

0.5045

Average

0.0021

0.5027

Step 2: Compute the range for each sample by subtracting

the lowest value from the highest value. For example,
in sample 1 the range is 0.5027 0.5009 = 0.0018 in.
Similarly, the ranges for samples 2, 3, 4, and 5 are
0.0021, 0.0017, 0.0026, and 0.0022 in., respectively. As
shown in the table, R = 0.0021.
5 32

Using x- and R-Charts

Step 3: To construct the R-chart, select the appropriate
constants from Table 5.1 for a sample size of 4. The
control limits are
UCLR = D4R = 2.282(0.0021) = 0.00479 in.
LCLR = D3R = 0(0.0021) = 0 in.
Step 4: Plot the ranges on the R-chart, as shown in Figure
5.10. None of the sample ranges falls outside the
control limits so the process variability is in statistical
control. If any of the sample ranges fall outside of the
limits, or an unusual pattern appears, we would search
for the causes of the excessive variability, correct
them, and repeat step 1.

5 33

Using x- and R-Charts

Figure 5.10 Range Chart from the OM Explorer x and R-Chart Solver for the
Metal Screw, Showing That the Process Variability Is in Control

5 34

Using x- and R-Charts

Step 5: Compute the mean for each sample. For example, the
mean for sample 1 is
0.5014 + 0.5022 + 0.5009 + 0.5027
= 0.5018 in.
4
Similarly, the means of samples 2, 3, 4, and 5 are 0.5027,
0.5026, 0.5020, and 0.5045 in., respectively. As shown in
the table, x = 0.5027.

5 35

Using x- and R-Charts

Step 6: Now construct the x-chart for the process average. The
average screw diameter is 0.5027 in., and the average
range is 0.0021 in., so use x = 0.5027, R = 0.0021, and A2
from Table 5.1 for a sample size of 4 to construct the
control limits:
LCLx = x A2R = 0.5027 0.729(0.0021) = 0.5012 in.
UCLx = x + A2R = 0.5027 + 0.729(0.0021) = 0.5042 in.
Step 7: Plot the sample means on the control chart, as shown in
Figure 5.11.
The mean of sample 5 falls above the UCL, indicating
that the process average is out of statistical control and
that assignable causes must be explored, perhaps using
a cause-and-effect diagram.
5 36

Using x- and R-Charts

Figure 5.11 The x-Chart from the OM Explorer x and R-Chart Solver for the
Metal Screw, Showing That Sample 5 is out of Control
5 37

An Alternate Form
If the standard deviation of the process distribution is known,
another form of the x-chart may be used:
UCLx = x + zx and LCLx = x zx
where
x

n
x
z

= / n
= standard deviation of the process distribution
= sample size
= central line of the chart
= normal deviate number

5 38

Using Process Standard Deviation

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.
Mean time to process a customer at the peak demand period
is 5 minutes
Standard deviation of 1.5 minutes
Sample size of six customers
Design an x-chart that has a type I error of 5 percent
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 control?

5 39

Using Process Standard Deviation

SOLUTION
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 x-chart. 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

5 40

Using Process Standard Deviation

Obtain the value for z in the following way
For a type I error of 5 percent, 2.5 percent of the curve will
be above the UCL and 2.5 percent below the LCL
From the normal distribution table (see Appendix 1) we find
the z value that leaves only 2.5 percent in the upper portion
of the normal curve (or 0.9750 in the table)
So z = 1.96
The two new samples are below the LCL of the chart,
implying that the average time to serve a customer has
dropped
Assignable causes should be explored to see what caused
the improvement

5 41

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 and each tube is weighed in ounces.
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

8.13

8.14

8.11

8.13

8.14

8.12

8.13

8.14

8.130

0.03

Avgs

8.050

0.38

5 42

Application 5.1
Assuming that taking only 6 samples is sufficient, is the process
in statistical control?
Conclusion on process variability given R = 0.38 and n = 8:
UCLR = D4R = 1.864(0.38) = 0.708
LCLR = D3R = 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. This makes the x
calculation moot.

5 43

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?

5 44

Application 5.1
Now R = 0.45, x = 8.034, and n = 8
UCLR = D4R = 1.864(0.45) = 0.839
LCLR = D3R = 0.136(0.45) = 0.061
UCLx = x + A2R = 8.034 + 0.373(0.45) = 8.202
LCLx = x A2R = 8.034 0.373(0.45) = 7.832
The resulting control charts indicate that the process is
actually in control.

5 45

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 is

p 1 p / n

p = the center line on the chart

and
UCLp = p + zp and LCLp = p zp

5 46

Using p-Charts
Periodically a random sample of size n is taken
The number of defectives is counted
The proportion defective p is calculated
If the proportion defective falls outside the UCL, it
is assumed the process has changed and
assignable causes are identified and eliminated
If the proportion defective falls outside the LCL,
the process may have improved and assignable
causes are identified and incorporated

5 47

Using a p-Chart
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
The results for the past 12 weeks are shown in the following
table
Is the booking process out of statistical control?
Use three-sigma control limits, which will provide a Type I
error of 0.26 percent.

5 48

Using a p-Chart
Sample
Number

Wrong Account
Numbers

Sample
Number

Wrong Account
Numbers

15

24

12

19

10

10

17

19

11

15

12

3
Total

147

5 49

Using a p-Chart
Step 1: Using this sample data to calculate p
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

5 50

Using a p-Chart
Step 2: Calculate the sample proportion defective. For sample 1,
the proportion of defectives is 15/2,500 = 0.0060.
Step 3: Plot each sample proportion defective on the chart, as
shown in Figure 5.12.
Fraction Defective

.0091

X
.0049

UCL

X
X

X
Mean

X
X

.0007
|

X
|

6
7
Sample

10

11

12

LCL

Figure 5.12 The p-Chart from POM for Windows for Wrong Account Numbers,
Showing That Sample 7 is Out of Control
5 51

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

15

16

10

17

11

18

12

19

13

20

14

Total =

72

5 52

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.
5 53

Control Charts for Attributes

c-charts count the number of defects per unit of
service encounter
The underlying distribution is the Poisson
distribution
The mean of the distribution is c and the
standard deviation is c
UCLc = c + zc

and

LCLc = c zc

5 54

Using a c-Chart
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 20 defects per roll.
a. Set up a control chart for the number of 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. Is the paper production
process in control?

5 55

Using a c-Chart
SOLUTION
a. The average number of defects per roll is 20. Therefore
UCLc = c + zc = 20 + 2(20) = 28.94
LCLc = c zc = 20 2(20) = 11.06

The control chart is shown in Figure 5.13

5 56

Using a c-Chart

Figure 5.13 The c-Chart from POM for Windows for Defects per Roll of Paper

b. Because the first five rolls had defects that fell within the
control limits, the process is still in control. Five defects,
however, is less than the LCL, and therefore, the process is
technically out of control. The control chart indicates that
something good has happened.
5 57

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.

5 58

Application 5.3
6 5 0 4 6 4 1 6 5 0 9 2
4
c
12
c

4 2

UCL c c z c 4 2 2 8
LCL c c z c 4 2 2 0

5 59

Process Capability
Process capability refers to the ability of
the process to meet the design
specification for the product or service
Design specifications are often expressed
as a nominal value and a tolerance

5 60

Process Capability
Nominal
value
Process distribution
Lower
specification

20

Upper
specification

25

30

Minutes

(a) Process is capable

Figure 5.14 The Relationship Between a Process Distribution and
Upper and Lower Specifications
5 61

Process Capability
Nominal
value
Process distribution
Lower
specification

20

Upper
specification

25

30

Minutes

(b) Process is not capable

Figure 5.14 The Relationship Between a Process Distribution and
Upper and Lower Specifications
5 62

Process Capability
Nominal value
Six sigma

Four sigma

Two sigma
Lower
specification

Upper
specification

Mean
Figure 5.15 Effects of Reducing Variability on Process Capability
5 63

Process Capability
The 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

5 64

Process Capability
The process capability ratio tests whether
process variability is the cause of
problems
Upper specification Lower specification
Cp =
6

5 65

Determining Process Capability

Step 1. Collect data on the process output,
and calculate the mean and the
standard deviation of the process
output distribution.
Step 2. Use the data from the process
distribution to compute process
control charts, such as an x- and an
R-chart.

5 66

Determining Process Capability

Step 3. Take a series of at least 20 consecutive
random samples from the process and plot
the results on the control charts. If the
sample statistics are within the control limits
of the charts, the process is in statistical
control. If the process is not in statistical
control, look for assignable causes and
eliminate them. Recalculate the mean and
standard deviation of the process
distribution and the control limits for the
charts. Continue until the process is in
statistical control.

5 67

Determining Process Capability

Step 4. Calculate the process capability index. If the
results are acceptable, the process is capable
and document any changes made to the
process; continue to monitor the output by
using the control charts. If the results are
unacceptable, calculate the process capability
ratio. If the results are acceptable, the process
variability is fine and management should
focus on centering the process. If not,
management should focus on reducing the
variability in the process until it passes the
test. As changes are made, recalculate the
mean and standard deviation of the process
distribution and the control limits for the
charts and return to step 3.
5 68

Assessing Process Capability

EXAMPLE 5.5
The intensive care unit lab process has an average
turnaround time of 26.2 minutes and a standard deviation of
1.35 minutes
The nominal value for this service is 25 minutes with an
upper specification limit of 30 minutes and a lower
specification limit of 20 minutes
The administrator of the lab wants to have four-sigma
performance for her lab
Is the lab process capable of this level of performance?

5 69

Assessing Process Capability

SOLUTION
The administrator began by taking a quick check to see if the
process is capable by applying the process capability index:
26.2 20.0
Lower specification calculation =
= 1.53
3(1.35)
30.0 26.2
Upper specification calculation =
= 0.94
3(1.35)
Cpk = Minimum of [1.53, 0.94] = 0.94
Since the target value for four-sigma performance is 1.33, the
process capability index told her that the process was not
capable. However, she did not know whether the problem was
the variability of the process, the centering of the process, or
both. The options available to improve the process depended
on what is wrong.
5 70

Assessing Process Capability

She next checked the process variability with the process
capability ratio:

30.0 20.0
= 1.23
Cp =
6(1.35)
The process variability did not meet the four-sigma target of
1.33. Consequently, she initiated a study to see where
variability was introduced into the process. Two activities,
report preparation and specimen slide preparation, were
identified as having inconsistent procedures. These procedures
were modified to provide consistent performance. New data
were collected and the average turnaround was now 26.1
minutes with a standard deviation of 1.20 minutes.

5 71

Assessing Process Capability

She now had the process variability at the four-sigma level of
performance, as indicated by the process capability ratio:

30.0 20.0
= 1.39
Cp =
6(1.20)
However, the process capability index indicated additional
problems to resolve:
(26.1 20.0) (30.0 26.1)
,
= 1.08
Cpk = Minimum of
3(1.20)
3(1.20)

5 72

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
0.192 ounces. Compute the process capability index and
process capability ratio to assess whether the filling process
is capable and set properly.

5 73

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)

Recall that a capability index value of 1.0 implies that the firm
is producing three-sigma quality (0.26% defects) and that the
process is consistently producing outputs within
specifications even though some defects are generated. The
value of 0.948 is far below the target of 1.33. Therefore, we
can conclude that the process is not capable. Furthermore,
we do not know if the problem is centering or variability.
5 74

Application 5.4
b. Process capability ratio:
Upper specification Lower specification
8.60 7.40
Cp =
=
= 1.0417
6
6(0.192)

Recall that if the Cpk is greater than the critical value (1.33 for
four-sigma quality) we can conclude that the process is
capable. Since the Cpk is less than the critical value, either the
process average is close to one of the tolerance limits and is
generating defective output, or the process variability is too
large. 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.
5 75

Quality Engineering
Quality engineering is an approach
originated by Genichi Taguchi that involves
combining engineering and statistical
methods to reduce costs and improve
quality by optimizing product design and
manufacturing processes.
The quality loss function is based on the
concept that a service or product that
barely conforms to the specifications is
more like a defective service or product
than a perfect one.
5 76

Loss (dollars)

Quality Engineering

Lower
specification

Nominal
value

Upper
specification

Figure 5.16 Taguchis Quality Loss Function

5 77

International Standards
ISO 9000:2000 addresses quality
management by specifying what the firm
does to fulfill the customers quality
requirements and applicable regulatory
requirements while enhancing customer
satisfaction and achieving continual
improvement of its performance
Companies must be certified by an external
examiner
Assures customers that the organization is
performing as they say they are
5 78

International Standards
ISO 14000:2004 documents a firms
environmental program by specifying what
the firm does to minimize harmful effects
on the environment caused by its activities
The standards require companies to keep
track of their raw materials use and their
generation, treatment, and disposal of
hazardous wastes
Companies are inspected by outside,
private auditors on a regular basis

5 79

International Standards
External benefits are primarily increased
sales opportunities
ISO certification is preferred or required by
many corporate buyers
Internal benefits include improved
profitability, improved marketing, reduced
costs, and improved documentation and
improvement of processes

5 80

The Baldrige Award

The Malcolm Baldrige National Quality
Award promotes, recognizes, and
publicizes quality strategies and
achievements by outstanding
organizations
It is awarded annually after a rigorous
application and review process
Award winners report increased
productivity, more satisfied employees and
customers, and improved profitability

5 81

The Baldrige Award

The seven categories of the award are
1.

Leadership

2.

Strategic Planning

3.

Customer and Market Focus

4.

Measurement, Analysis, and Knowledge

Management

5.

Workforce Focus

6.

Process Management

7.

Results

5 82

Solved Problem 1
The Watson Electric Company produces incandescent
lightbulbs. The following data on the number of lumens for 40watt lightbulbs 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

a. Calculate control limits for an R-chart and an x-chart.

b. Since these data were collected, some new employees were
hired. A new sample obtained the following readings: 570,
603, 623, and 583. Is the process still in control?

5 83

Solved Problem 1
SOLUTION
a. To calculate x, compute the mean for each sample. To
calculate R, subtract the lowest value in the sample from the
highest value in the sample. For example, for sample 1,
604 + 612 + 588 + 600
= 601
x=
4
R = 612 588 = 24
x

601

24

602

10

582

22

602

32

604

24

Sample

Total
Average

2,991
x = 598.2

112
R = 22.4
5 84

Solved Problem 1
The R-chart control limits are
UCLR = D4R = 2.282(22.4) = 51.12
LCLR = D3R = 0(22.4) = 0
The x-chart control limits are
UCLx = x + A2R = 598.2 + 0.729(22.4) = 614.53
LCLx = x A2R = 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 current estimate for R. A search
for assignable causes inducing excessive variability must be
conducted.
5 85

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 that none was out
of control.

5 86

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

11

18

26

10

12

27

14

13

16

28

14

29

11

15

11

30

9
Total 300
5 87

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?

5 88

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
p=

300
= 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
5 89

Solved Problem 2
b. Samples for the next four days showed the following:
Sample

Number of Defective Records

Proportion

Tues

17

0.068

Wed

15

0.060

Thurs

22

0.088

Fri

21

0.084

Samples for Thursday and Friday are out of control. The

supervisor should look for the problem and, upon identifying
it, take corrective action.

5 90

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 intersection?

5 91

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 = c + z c = 3 + 3 3 = 8.20
LCLc = c z c = 3 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 the increase in accidents was
due to chance.
5 92

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 samples of six chicken breasts to
measure calorie content.
a. Design an x-chart using the process standard deviation.
b. The product design calls for the average chicken breast to
contain 400 100 calories. Calculate the process capability
index (target = 1.33) and the process capability ratio.
Interpret the results.

5 93

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

25

10.2 calories
n
6

UCLx = x + zx = 420 + 3(10.2) = 450.6 calories

LCLx = x zx = 420 3(10.2) = 389.4 calories

5 94

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

x Lower specification Upper specification x

,
3
3
500 420
420 300
= 1.60,
= 1.07
3(25)
3(25)

The process capability ratio is

Upper specification Lower specification
500 300
Cp =
=
= 1.33
6
6(25)

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 mean of the process distribution is too close
to the upper specification.
5 95

5 96