1. Quality Improvement Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

2. Definitions Quality product or service: A product or service that meets or exceeds the expectations of the customer. Process: Any combination of people, machinery, material, and methods that is intended to produce a product or service. Quality Characteristics: Features of a product that describe its fitness for use. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

3. Definitions Statistical Process Control (SPC): The application of statistical quality-control methods to measure and analyze the variation found in a process. Control Chart: A statistical chart used to monitor various aspects of a process and to determine if the process is in control or out of control. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

4. Malcolm Baldrige National Quality Award Criteria Leadership System Strategic Planning Customer and Market Focus Information and Analysis Human Resource Focus Process Management Business Results Introduction to Business Statistics, 5e Kvanli/Guynes/ Pavur (c)2000 South- Western College Publishing

5. Quality Improvement Tools Flowcharts Cause-and-Effect Diagrams Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

6. Flowchart Figure 12.2 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

7. Cause-and-Effect Diagram Figure 12.3 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

8. Process Variation and Control Charts: Sources of Variation Machinery People Materials Production Methods The Environment Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

9. Deming Funnel Experiment: Strategies Strategy 1: Do not react to this random variation and do not move the funnel. Strategy 2: Measure the distance from the marble’s resting place to the bull’s-eye. Move the funnel and equal distance, but in the opposite direction. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

10. Deming Funnel Experiment: Strategies Strategy 3: Measure the distance from the marble’s resting place to the bull’s-eye. Move the funnel this distance, in the opposite direction, starting at the bull’s- eye. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

11. Deming Funnel Experiment Figure 12.5 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

12. Control Charts A process is in control if the observed variation is due to inherent or natural variation. This variability is the cumulative effect of many small, essentially uncontrollable, causes. A process in out of control if a relatively large variation is introduced that can be traced to an assignable cause. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

13. General Form of a Control Chart Figure 12.6 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

14. Control Chart Figure 12.7 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

15. X and R Charts Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

16. X and R Charts Tables 12.2 & 12.3 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

17. X and R Charts Process for Estimating  Determine the average of the m values of R. Select the values of d 2 from Table 12.3 using the corresponding sample size, n. Estimate  using: Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

18. X and R Charts Control Limits Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

19. X and R Charts Control Limits Figure 12.9 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

20. R Chart Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

21. R Chart By defining Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

22. Steps for Making X and R Charts Collect m samples of data, each of size n. Compute the average of each subgroup. Compute the range for each subgroup. Find the overall mean. Find the average range. Estimate . Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

23. Steps for Making X and R Charts Compute the 3-sigma control limits for X. Compute the 3-sigma control limits for R Construct the control charts by plotting X and R points for each subgroup on the same vertical line. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

24. Pattern Analysis for X Figure 12.12 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

25. Minitab X Chart Figure 12.13 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

26. Control Chart for the Proportion Nonconforming: The p chart Reasons for Using a p Chart Quality measurements are not possible. Quality measurements are not practical. Many characteristics on each part are being judged during inspection The main question of interest is: “will the process be able to produce conforming products over time?” Introduction to Business Statistics, 5e Kvanli/Guy nes/Pavur (c)2000 South- Western College Publishing

27. Steps for Making p Charts Collect m samples of data, each of size, n. Determine the proportion nonconforming for each sample. Find p, the overall proportion nonconforming. Compute the 3-sigma control limits Draw the control lines and plot the values of p i. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

28. p Chart Equations Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

29. p Chart for Ex. 12.3 Figure 12.17 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

30. The c Chart Construction Collect m samples of data, each of size, n. Determine the number of nonconformities for the ith unit. Call this value c i. Find the average number of nonconformities per unit, c. Compute the 3-sigma control limits. Construct the chart. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

31. c Chart Equations Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

32. Process Capability Specification Limits: process requirements Lower spec limit (LSL): the lower limit of the process output that meets the process requirements. Upper spec limit (USL): the upper limit of the process output that meets the process requirements. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

33. Process Capability Figure 12.20 The difference between 12.01 and 12.19 is referred to as the process spread. Introduction to Business Statistics, 5e Kvanli/Guyne s/Pavur (c)2000 South- Western College Publishing

34. Process Capability Figure 12.21 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

35. Process Capability Ratio C p Assumptions: The process is centered within specifications. The process is normally distributed. The process is stable. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

36. CpCp Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

37. Process Capability Ratio C pk Assumptions The process may or may not be centered in spec. The process is normally distributed. The process is stable. Control charts will be used to monitor the process over time. Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

38. Figure 12.22 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

39. Procedure for Finding C pk Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing

40. Figure 12.23 Introduction to Business Statistics, 5e Kvanli/Guynes/Pavur (c)2000 South-Western College Publishing