Statistical Quality Control

Learning Objectives

After this lecture set, you are expected to:

Demonstrate understanding of the purpose and function of statistical quality

control in production and service operations

Demonstrate understanding of basic statistical process control and acceptance

sampling techniques

Demonstrate understanding of the application of quality control charts in quality

management, with particular reference to the following two types of control
charts:

(1) Control charts for variables

Specifically; X-bar and R charts, X-bar and sigma chart

(2) Control charts for attributes

Specifically; P-chart, NP-chart, C-chart

Definition of Quality

Quality is the totality of features and characteristics of a product or service that bears on
its ability to satisfy given needs.

Quality Terminology

Quality assurance refers to the entire system of policies, procedures, and guidelines
established by an organization to achieve and maintain quality.
The objective of quality engineering is to include quality in the design of products and
processes and to identify potential quality problems prior to production.
Quality control consists of making a series of inspections and measurements to determine
whether quality standards are being met.

Quality Measurement: Attributes vs Variables

Attributes:
Characteristics that are measured as either "acceptable" or "not acceptable", thus have
only discrete, binary, or integer values.
Variables:
Characteristics that are measured on a continuous scale

Statistical Quality Control Defined

Statistical quality control, therefore, is the application of statistical techniques to measure

and evaluate the quality of a product, service, or process.
 Two basic categories:

I. Statistical Process Control (SPC):

- the application of statistical techniques to determine whether a process is functioning

as desired.

II. Acceptance Sampling:

- the application of statistical techniques to determine whether a population of items

should be accepted or rejected based on inspection of a sample of those items.

The goal of SPC is to determine whether the process can be continued or whether it
should be adjusted to achieve a desired quality level.
If the variation in the quality of the production output is due to assignable causes
(operator error, worn-out tooling, bad raw material, . . .) the process should be adjusted or
corrected as soon as possible.
If the variation in output is due to common causes (variation in materials, humidity,
temperature, . . .) which the manager cannot control, the process does not need to be
adjusted.

SPC Hypotheses

SPC procedures are based on hypothesis-testing methodology.

The null hypothesis H0 is formulated in terms of the production process being in control.
The alternative hypothesis Ha is formulated in terms of the process being out of control.
As with other hypothesis-testing procedures, both a Type I error (adjusting an in-control
process) and a Type II error (allowing an out-of-control process to continue) are possible.

Decisions and State of the Process

Type I and Type II Errors

State of Production Process
Control Charts

SPC uses graphical displays known as control charts to monitor a production process.
Control charts provide a basis for deciding whether the variation in the output is due to
common causes (in control) or assignable causes (out of control).
Two important lines on a control chart are the upper control limit (UCL) and lower
control limit (LCL).
These lines are chosen so that when the process is in control, there will be a high
probability that the sample finding will be between the two lines.
Values outside of the control limits provide strong evidence that the process is out of
control.

Types of Control Charts

An x chart is used if the quality of the output is measured in terms of a variable such as
length, weight, temperature, and so on.
x represents the mean value found in a sample of the output.
An R chart is used to monitor the range of the measurements in the sample.
A p chart is used to monitor the proportion defective in the sample.
An np chart is used to monitor the number of defective items in the sample.

x Chart Structure
Control Limits for an x Chart

Process Mean and Standard Deviation Known

Example: Granite Rock Co.

Control Limits for an x Chart: Process Mean and Standard Deviation Known

The weight of bags of cement filled by Granites packaging process is normally

distributed with a mean of 50 pounds and a standard deviation of 1.5 pounds. What
should be the control limits for samples of 9 bags?

UCL = 50 + 3(.5) = 51.5

LCL = 50 - 3(.5) = 48.5

Process Mean and Standard Deviation Unknown

where:

x = overall sample mean

R = average range

A2 = a constant that depends on n; taken from

Factors for Control Charts table

Factors for x and R Control Charts

 Factors Table (Partial)

n d2 A2 d3 D3 D4
5 2.326 0.577 0.864 0 2.114
6 2.534 0.483 0.848 0 2.004
7 2.704 0.419 0.833 0.076 1.924
8 2.847 0.373 0.820 0.136 1.864
9 2.970 0.337 0.808 0.184 1.816
10 3.078 0.308 0.797 0.223 1.777
. . . . . .
. . . . . .

Control Limits for an R Chart

UCL = RD
4
LCL = RD
3

where:

R = average range

D3, D4 = constants that depend on n; found in Factors for Control Charts

table

Factors Table (Partial)

Example: Granite Rock Co.

Control Limits for x and R Charts: Process Mean and Standard Deviation Unknown
Suppose Granite does not know the true mean and standard deviation for its bag filling
process. It wants to develop x and R charts based on twenty samples of 5 bags each. The
twenty samples resulted in an overall sample mean of 50.01 kg and an average range of .322
kgs.

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

UCL = RD = .322(2.114) = .681

4

LCL = RD = .322(0) = 0
3

R Chart

UCL = x + A R = 50.01 + .577(.322) = 50.196

2
LCL = x - A R = 50.01 - .577(.322) = 49.824
2

x Chart
Control Limits for a p Chart

where:

np > 5
n (1-p) > 5

Note: If computed LCL is negative, set LCL = 0

Example: Barclays Bank

Every cheque cashed or deposited at Barclays Bank must be encoded with the amount of the
cheque before it can begin the Federal Reserve clearing process. The accuracy of the cheque
encoding process is of utmost importance. If there is any discrepancy between the amount a
cheque is made out for and the encoded amount, the cheque is defective.

Example: Norwest Bank

Twenty samples, each consisting of 250 cheques, were selected and examined when the
encoding process was known to be operating correctly. The number of defective cheques
found in the samples follow.

Example: Barclays Bank

Control Limits for a p Chart
Suppose Barclays does not know the proportion of defective cheques, p, for the encoding
process when it is in control. We will treat the data (20 samples) collected as one large
sample and compute the average number of defective cheques for all the data. That value
can then be used to estimate p.

Estimated p = 80/((20)(250)) = 80/5000 = .016

p Chart
Control Limits for an np Chart

assuming:

Note: If computed LCL is negative, set LCL = 0

Interpretation of Control Charts

The location and pattern of points in a control chart enable us to determine, with a small
probability of error, whether a process is in statistical control.
 A primary indication that a process may be out of control is a data point outside the
control limits.
Certain patterns of points within the control limits can be warning signals of quality
problems:
Large number of points on one side of centre line.
Six or seven points in a row that indicate either an increasing or decreasing trend.
. . . and other patterns.

Acceptance Sampling

Acceptance sampling is a statistical method that enables us to base the accept-reject

decision on the inspection of a sample of items from the lot.
Acceptance sampling has advantages over 100% inspection including: less expensive,
less product damage, fewer people involved, . . . and more.

Acceptance Sampling Procedure

Acceptance sampling is based on hypothesis-testing methodology.

The hypotheses are:

H0: Good-quality lot

Ha: Poor-quality lot

The Outcomes of Acceptance Sampling

 Type I and Type II Errors

Binomial Probability Function for Acceptance Sampling

where:

n = sample size

p = proportion of defective items in lot

x = number of defective items in sample

f (x) = probability of x defective items in sample

Example: Acceptance Sampling

An inspector takes a sample of 20 items from a lot. Her policy is to accept a lot if no more
than 2 defective items are found in the sample. Assuming that 5 percent of a lot is defective,
what is the probability that she will accept a lot? Reject a lot?

n = 20, c = 2, and p = .05

P(Accept Lot) = f(0) + f(1) + f(2)

= .3585 + .3774 + .1887

= .9246

P (Reject Lot) = 1 - .9246

= .0754

Using the Tables of Binomial Probabilities

Selecting an Acceptance Sampling Plan

In formulating a plan, managers must specify two values for the fraction defective in the
lot.
a = the probability that a lot with p0 defectives will be rejected.
b = the probability that a lot with p1 defectives will be accepted.
Then, the values of n and c are selected that result in an acceptance sampling plan that
comes closest to meeting both a and b requirements specified.

Operating Characteristic Curve

Next page

Multiple Sampling Plans

A multiple sampling plan uses two or more stages of sampling.

At each stage the decision possibilities are:

stop sampling and accept the lot,

stop sampling and reject the lot, or

continue sampling.

Multiple sampling plans often result in a smaller total sample size than single-sample
plans with the same Type I error and Type II error probabilities.
Diagrams from pages 44, 42, 37, 35 & 9