Operations

Management
Supplement 6 –
Statistical Process Control
PowerPoint presentation to accompany
Heizer/Render
Principles of Operations Management, 6e
Operations Management, 8e

© 2006
© 2006 Prentice
Prentice Hall, Inc. Hall, Inc. S6 – 1
 Statistical Process Control
(SPC)
 Variability is inherent in every process
 Natural or common causes
 Special or assignable causes
 Provides a statistical signal when
assignable causes are present
 Detect and eliminate assignable
causes of variation
© 2006 Prentice Hall, Inc. S6 – 2
 Natural Variations
 Also called common causes
 Affect virtually all production processes
 Expected amount of variation
 Output measures follow a probability
distribution
 For any distribution there is a measure
of central tendency and dispersion
 If the distribution of outputs falls within
acceptable limits, the process is said to
be “in control”
© 2006 Prentice Hall, Inc. S6 – 3
 Assignable Variations
 Also called special causes of variation
 Generally this is some change in the process
 Variations that can be traced to a specific
reason
 The objective is to discover when
assignable causes are present
 Eliminate the bad causes
 Incorporate the good causes

© 2006 Prentice Hall, Inc. S6 – 4

 Types of Data
Variables Attributes
 Characteristics that  Defect-related
can take any real characteristics
value  Classify products
 May be in whole or as either good or
in fractional bad or count
numbers defects
 Continuous random  Categorical or
variables discrete random
variables
© 2006 Prentice Hall, Inc. S6 – 5
 Control Charts for Variables

 For variables that have continuous

dimensions
 Weight, speed, length, strength, etc.
 x-charts are to control the central
tendency of the process
 R-charts are to control the dispersion of
the process
 These two charts must be used together

© 2006 Prentice Hall, Inc. S6 – 6

 Setting Chart Limits
For x-Charts when we know 
Upper control limit (UCL) = x + zx
Lower control limit (LCL) = x - zx
where x =mean of the sample means or
a target value set for the process
z =number of normal standard
deviations
x =standard deviation of the
sample means
=/ n
© 2006 Prentice Hall, Inc.
 =population standard S6 – 7
 Setting Control Limits
Hour 1 Hour Mean Hour Mean
Sample Weight of 1 16.1 7 15.2
Number Oat Flakes 2 16.8 8 16.4
1 17 3 15.5 9 16.3
2 13 4 16.5 10 14.8
3 16 5 16.5 11 14.2
4 18 6 16.4 12 17.3
n=9 5 17
6 16 For 99.73% control limits, z = 3
7 15
8 17 UCLx = x + zx = 16 + 3(1/3) = 17 ozs
9 16
Mean 16.1 LCLx = x - zx = 16 - 3(1/3) = 15 ozs
 = 1
© 2006 Prentice Hall, Inc. S6 – 8
 Setting Control Limits
Control Chart
for sample of Variation due
Out of to assignable
9 boxes control causes

17 = UCL

Variation due to
16 = Mean natural causes

15 = LCL

Variation due
| | | | | | | | | | | |
to assignable
1 2 3 4 5 6 7 8 9 10 11 12 Out of causes
Sample number control

© 2006 Prentice Hall, Inc. S6 – 9

 Setting Chart Limits
For x-Charts when we don’t know 

Upper control limit (UCL) = x + A2R

Lower control limit (LCL) = x - A2R

where R =average range of the samples

A2 =control chart factor found in
Table S6.1
x =mean of the sample means

© 2006 Prentice Hall, Inc. S6 – 10

 Control Chart Factors
Sample Size Mean Factor Upper Range Lower
Range
n A2 D4 D3
2 1.880 3.268 0
3 1.023 2.574 0
4 .729 2.282 0
5 .577 2.115 0
6 .483 2.004 0
7 .419 1.924 0.076
8 .373 1.864 0.136
9 .337 1.816 0.184
10 .308 1.777 0.223
12 .266 1.716 0.284
Table S6.1
© 2006 Prentice Hall, Inc. S6 – 11
 R – Chart

 Type of variables control chart

 Shows sample ranges over time
 Difference between smallest and
largest values in sample
 Monitors process variability
 Independent from process mean

© 2006 Prentice Hall, Inc. S6 – 12

 Setting Chart Limits
For R-Charts

Upper control limit (UCLR) = D4R

Lower control limit (LCLR) = D3R

where
R =average range of the samples
D3 and D4=control chart factors from
Table S6.1

© 2006 Prentice Hall, Inc. S6 – 13

 Setting Control Limits
Average range R = 5.3 pounds
Sample size n = 5
From Table S6.1 D4 = 2.115, D3 = 0

UCLR = D4R UCL = 11.2

= (2.115)(5.3)
= 11.2 pounds Mean = 5.3

LCLR = D3R LCL = 0

= (0)(5.3)
= 0 pounds
© 2006 Prentice Hall, Inc. S6 – 14
 Mean and Range Charts
(a)
These (Sampling mean is
sampling shifting upward but
distributions range is consistent)
result in the
charts below

UCL
(x-chart detects
x-chart shift in central
tendency)
LCL
UCL
(R-chart does not
R-chart detect change in
mean)
LCL
Figure S6.5
© 2006 Prentice Hall, Inc. S6 – 15
 Control Charts for Attributes
 For variables that are categorical
 Good/bad, yes/no,
acceptable/unacceptable
 Measurement is typically counting
defectives
 Charts may measure
 Percent defective (p-chart)
 Number of defects (c-chart)
© 2006 Prentice Hall, Inc. S6 – 16
 Control Limits for p-Charts
Population will be a binomial distribution,
but applying the Central Limit Theorem
allows us to assume a normal distribution
for the sample statistics

UCLp = p + zp^ p(1 - p)

p =
^
n
LCLp = p - zp^
p =mean fraction defective in the sample
z =number of standard deviations
p =standard
^ deviation of the sampling distribution
n =sample size
© 2006 Prentice Hall, Inc. S6 – 17
 p-Chart for Data Entry
Sample Number Fraction Sample Number Fraction
Number of Errors Defective Number of Errors Defective
1 6 .06 11 6 .06
2 5 .05 12 1 .01
3 0 .00 13 8 .08
4 1 .01 14 7 .07
5 4 .04 15 5 .05
6 2 .02 16 4 .04
7 5 .05 17 11 .11
8 3 .03 18 3 .03
9 3 .03 19 0 .00
10 2 .02 20 4 .04
Total = 80
80 (.04)(1 - .04)
p= = .04 p^ = = .02
(100)(20) 100
© 2006 Prentice Hall, Inc. S6 – 18
 p-Chart for Data Entry
UCLp = p + zp^ = .04 + 3(.02) = .10
LCLp = p - zp^ = .04 - 3(.02) = 0
.11 –
.10 – UCLp = 0.10
.09 –
Fraction defective

.08 –
.07 –
.06 –
.05 –
.04 – p = 0.04
.03 –
.02 –
.01 – LCLp = 0.00
.00 – | | | | | | | | | |
2 4 6 8 10 12 14 16 18 20
Sample number
© 2006 Prentice Hall, Inc. S6 – 19
 p-Chart for Data Entry
UCLp = p + zp^ = .04 + 3(.02) = .10
Possible
LCLp = p - zp^ = .04 - 3(.02) =assignable
0
causes present
.11 –
.10 – UCLp = 0.10
.09 –
Fraction defective

.08 –
.07 –
.06 –
.05 –
.04 – p = 0.04
.03 –
.02 –
.01 – LCLp = 0.00
.00 – | | | | | | | | | |
2 4 6 8 10 12 14 16 18 20
Sample number
© 2006 Prentice Hall, Inc. S6 – 20
 Control Limits for c-Charts
Population will be a Poisson distribution,
but applying the Central Limit Theorem
allows us to assume a normal distribution
for the sample statistics

UCLc = c + 3 c LCLc = c - 3 c

c =mean number defective in the sample

© 2006 Prentice Hall, Inc. S6 – 21

 c-Chart for Cab Company
c = 54 complaints/9 days = 6 complaints/day

UCLc = c + 3 c 14 –
UCLc = 13.35
14

Number defective
=6+3 6 12 –
= 13.35 10 –
8 –
6 – c= 6
LCLc = c - 3 c 4 –
=3-3 6 2 – LCLc = 0
0 – | | | | | | | | |
=0 1 2 3 4 5 6 7 8 9
Day

© 2006 Prentice Hall, Inc. S6 – 22

 Patterns in Control Charts

Upper control limit

Target

Lower control limit

Normal behavior.
Process is “in control.”
Figure S6.7

© 2006 Prentice Hall, Inc. S6 – 23

 Patterns in Control Charts

Upper control limit

Target

Lower control limit

One plot out above (or
below). Investigate for
Figure S6.7 cause. Process is “out
of control.”
© 2006 Prentice Hall, Inc. S6 – 24
 Patterns in Control Charts

Upper control limit

Target

Lower control limit

Trends in either
direction, 5 plots.
Figure S6.7 Investigate for cause of
progressive change.
© 2006 Prentice Hall, Inc. S6 – 25
 Patterns in Control Charts

Upper control limit

Target

Lower control limit

Two plots very near
lower (or upper)
Figure S6.7 control. Investigate for
cause.
© 2006 Prentice Hall, Inc. S6 – 26
 Patterns in Control Charts

Upper control limit

Target

Lower control limit

Run of 5 above (or
below) central line.
Figure S6.7 Investigate for cause.

© 2006 Prentice Hall, Inc. S6 – 27

 Patterns in Control Charts

Upper control limit

Target

Lower control limit

Erratic behavior.
Investigate.
Figure S6.7

© 2006 Prentice Hall, Inc. S6 – 28

 Which Control Chart to Use
Variables Data
 Using an x-chart and R-chart:
 Observations are variables
 Collect 20 - 25 samples of n = 4, or n =
5, or more, each from a stable process
and compute the mean for the x-chart
and range for the R-chart
 Track samples of n observations each

© 2006 Prentice Hall, Inc. S6 – 29

 Which Control Chart to Use
Attribute Data
 Using the p-chart:
 Observations are attributes that can
be categorized in two states
 We deal with fraction, proportion, or
percent defectives
 Have several samples, each with
many observations

© 2006 Prentice Hall, Inc. S6 – 30

 Which Control Chart to Use
Attribute Data
 Using a c-Chart:
 Observations are attributes whose
defects per unit of output can be
counted
 The number counted is often a small
part of the possible occurrences
 Defects such as number of blemishes
on a desk, number of typos in a page
of text, flaws in a bolt of cloth

© 2006 Prentice Hall, Inc. S6 – 31

 Acceptance Sampling
 Form of quality testing used for
incoming materials or finished goods
 Take samples at random from a lot
(shipment) of items
 Inspect each of the items in the sample
 Decide whether to reject the whole lot
based on the inspection results
 Only screens lots; does not drive
quality improvement efforts
© 2006 Prentice Hall, Inc. S6 – 32
 Operating Characteristic
Curve
 Shows how well a sampling plan
discriminates between good and
bad lots (shipments)
 Shows the relationship between
the probability of accepting a lot
and its quality level

© 2006 Prentice Hall, Inc. S6 – 33

 AQL and LTPD
 Acceptable Quality Level (AQL)
 Poorest level of quality we are
willing to accept
 Lot Tolerance Percent Defective
(LTPD)
 Quality level we consider bad
 Consumer (buyer) does not want to
accept lots with more defects than
LTPD
© 2006 Prentice Hall, Inc. S6 – 34
 Producer’s and Consumer’s
Risks
 Producer's risk ()
 Probability of rejecting a good lot
 Probability of rejecting a lot when the
fraction defective is at or above the
AQL
 Consumer's risk ()
 Probability of accepting a bad lot
 Probability of accepting a lot when
fraction defective is below the LTPD
© 2006 Prentice Hall, Inc. S6 – 35
 An OC Curve
Figure S6.9
100 –
95 –  = 0.05 producer’s risk for AQL

75 –

Probability
of 50 –
Acceptance

25 –

10 –
 = 0.10 Percent
0 |– | | | | | | | |
0 1 2 3 4 5 6 7 8 defective
Consumer’s AQL LTPD
risk for LTPD Good Indifference
Bad lots
lots zone

© 2006 Prentice Hall, Inc. S6 – 36

 OC Curves for Different
Sampling Plans

n = 50, c = 1

n = 100, c = 2

© 2006 Prentice Hall, Inc. S6 – 37

 Average Outgoing Quality

(Pd)(Pa)(N - n)
AOQ =
N

where
Pd = true percent defective of the lot
Pa = probability of accepting the lot
N = number of items in the lot
n = number of items in the sample

© 2006 Prentice Hall, Inc. S6 – 38

 Average Outgoing Quality
1. If a sampling plan replaces all defectives
2. If we know the incoming percent
defective for the lot

We can compute the average outgoing

quality (AOQ) in percent defective

The maximum AOQ is the highest percent

defective or the lowest average quality
and is called the average outgoing quality
level (AOQL)
© 2006 Prentice Hall, Inc. S6 – 39
 An Operations Characteristic (OC) Curve

100
Producer’s Risk
90 N = Sample Size
80
C = Maximum Number of
P of accepting the lot percent

70 Defectives in a Sample to
60
accept the Lot.

50

40 N = 50 , C = 2
30

20

10

0
0 2 5 10

Consumer’s Risk Actual Percent Defectives

© 2006 Prentice Hall, Inc. S6 – 40

 OC Curves for Different Sample Sizes – The discriminating power of acceptance
plans (ability to reject bad lots and accept good lots) is enhanced by increasing
100
sample size (n).
95
90
85
Probability of Accepting the Lot. Percent

N = Sample Size
C= Maximum Number of
Defectives
in a Sample to accept the Lot.
N
=
25
.C
=
1
N
=
50
.C

20 N
=
=

10
2

0.
C=
10 4
5

0
1 5
A.Q.L. L.T.P.D
© 2006 Prentice Hall, Inc. Actual Percent Detectives in Lot S6 – 41
 Possible Errors in a Sampling Plan

A lot is accepted by A lot is rejected by

the sampling plan the sampling plan

Producer’s risk
Lot is actually good A favorable
(α)
(AQL) outcome
Type I Error

Consumer’s risk
Lot is actually bad A favorable
(β)
(LTPD) outcome
Type II error

© 2006 Prentice Hall, Inc. S6 – 42