Rev. 02/24/06 SJSU Bus. 142 - David Bentley 1

Chapter 11 – Statistical Thinking and ApplicationsChapter 11 – Statistical Thinking and Applications

“Red bead experiment”, random vs. non-random variation,

probability distribution, sampling, statistical methodology

Rev. 02/24/06 SJSU Bus. 142 - David Bentley 2

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Statistical Thinking All work occurs in a system of interconnected

processes Variation exists in all processes Understanding and reducing

variation are the keys to success “Variation is the enemy of quality”

09/13/02 SJSU Bus. 142 - David Bentley 3

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Sources of Variation in Production Processes

Materials

Tools

Operators Methods Measurement Instruments

HumanInspectionPerformance

EnvironmentMachines

INPUTS PROCESS OUTPUTS

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 4

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Variation Many sources of uncontrollable variation

exist (common = chance = random causes)

Special (assignable = special = non-random) causes of variation can be recognized and are controllable

Failure to understand these differences can increase variation in a system

09/13/02 SJSU Bus. 142 - David Bentley 5

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Importance of Understanding Variation

time

PREDICTABLE

?UNPREDECTIBLE

Mod. 02/24/06 SJSU Bus. 142 - David Bentley 6

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Two Fundamental Management Mistakes

1. Treating as a special cause any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to common causes (Type I error or Producer’s Risk)

2. Attributing to common causes any fault, complaint, mistake, breakdown, accident or shortage when it actually is due to a special cause (Type II error or Consumer’s Risk)

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 7

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Note to Instructors “The following slides can be used to

guide a class demonstration and discussion of the Deming Red Bead experiment using small bags of M&M’s® Chocolate Candies, from a suggestion I found on a TQ newsgroup several years ago. The good output (“white beads”) are the blue M&Ms, with the instructor playing the role of Dr. Deming.” - James R. Evans

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 8

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

We’re Going into Business!!! We have a new global customer and have to start up several factories. The customer wants only blue M&M’s®. So I need 4 teams of 8 people to do the work:

5 production workers2 inspectors1 Chief Inspector / recorder

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 9

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Production Process

1. Each production worker reaches into the bag and take one piece at a time out of the bag.2. Production worker produces 10 pieces

and places them on the napkin.3. Each inspector, independently, counts the blue ones produced by each worker, and passes the results (name and number of blue pieces) to the Chief Inspector to verify.4. If Chief Inspector agrees, s/he records the results by individual and reports the results to me.

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 10

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Second pass Reward best performer Penalize worst performer Remind everyone that customer only

wants blue M&M’s® Exhort workers to do better Repeat process

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 11

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Third pass Again reward best performer Again penalize worst performer Remind everyone that customer only

wants blue M&M’s® Warn workers their jobs are in

jeopardy Declare Zero Defects Day Repeat process

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 12

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Fourth pass Fire worst performers Put up banners, posters, slogans

(see next slide) Remind everyone that customer

only wants blue M&M’s® Warn that plant closure is possible Repeat process

09/13/02 SJSU Bus. 142 - David Bentley 13

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

09/13/02 SJSU Bus. 142 - David Bentley 14

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Bad News! Results are not good enough Customers are not satisfied Plant must be closed!

Mod. 09/13/02 SJSU Bus. 142 - David Bentley 15

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Lessons Learned Quality is made at the top. Rigid procedures are not enough. People are not always the main source

of variability. Numerical goals are often meaningless. Inspection is expensive and does not

improve quality. Slogans, posters, banners are not the

answer

09/13/02 SJSU Bus. 142 - David Bentley 16

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Statistical Methods Descriptive statistics Statistical inference Predictive statistics

09/13/02 SJSU Bus. 142 - David Bentley 17

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Review of Key Concepts Random variables Probability distributions Populations and samples Point estimates Sampling distributions Standard error of the mean

09/13/02 SJSU Bus. 142 - David Bentley 18

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Important Probability Distributions

Discrete Binomial Poisson

Continuous Normal Exponential

Rev. 02/26/06 SJSU Bus. 142 - David Bentley 19

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Central Limit Theorem

If simple random samples of size n are taken from any population, the probability distribution of sample means will be approximately normal as n becomes large.

09/13/02 SJSU Bus. 142 - David Bentley 20

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Sampling Methods Simple random sampling Stratified sampling Systematic sampling Cluster sampling Judgment sampling

09/13/02 SJSU Bus. 142 - David Bentley 21

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Sampling Error Sampling error (statistical error) Nonsampling error (systematic error) Factors to consider:

Sample size Appropriate sample design

09/13/02 SJSU Bus. 142 - David Bentley 22

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Design of Experiments A test or series of tests to compare

two or more methods to determine which is better, or to determine levels of controllable factors to optimize the yield of a process or minimize the variability of a response variable.

Factorial experiment Analysis of all combinations of factor

levels to understand main effects and interactions

09/13/02 SJSU Bus. 142 - David Bentley 23

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Descriptive Statistics Tool - Microsoft Excel Tools…Data Analysis… Descriptive

Statistics

09/13/02 SJSU Bus. 142 - David Bentley 24

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Descriptive Statistics Results

09/13/02 SJSU Bus. 142 - David Bentley 25

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Excel Histogram Tool Tools…Data Analysis…Histogram

09/13/02 SJSU Bus. 142 - David Bentley 26

THE MANAGEMENT AND CONTROL OF QUALITY, 5e, © 2002 South-Western/Thomson LearningTM

Histogram & Frequency Distribution