Fall 2023

Course name: Operations Management

Course code: MGSC 5128
 Chapter- 10
Statistical Quality Control

2
 Lecture Outline
▪ Introduction to Statistical Process Control
▪ Control Charts
▪ Process Capability
▪ Six Sigma Quality and Design of
Experiments

3
 Learning Objectives
• List and explain various elements of the
statistical process control planning process.
• Explain how control charts are designed
and the concepts that underlie their use,
and solve typical problems.
• Assess and solve problems involving
process capability.
• Describe Six Sigma quality and design of
experiments.

4
Introduction
▪ Statistical Quality Control uses statistical techniques
and sampling to monitor and test the quality of goods and
services.
• Acceptance sampling relies on inspection,
determines to accept or reject a product
• Statistical process control determines if process
is operating within acceptable limits during
production
▪ Inspection is the appraisal of goods/services against standards.

The best companies

design quality into the
process, thereby reducing the
need for inspection/tests.
5
Phases of Quality Control
Phases of statistical quality control/ improvement in
a company.

6
Inspection
Location of use of an acceptance sampling and statistical
process control within production

7
Statistical Process Control Planning
Process
1. Define important quality characteristics,
and how to measure

2. For each characteristic,

b. Plan
a. c. Plan the
Determine corrective
a quality ii. How
i. How to iii. Where action
control much to
inspect centralized process.
point inspect
or on-site

8
Where to Inspect in the Process:
Quality Control Point
1. At the beginning of the process:
Raw materials and purchased parts

3. At the operation where a characteristic of interest to customers is first

determined:
Before a costly operation
Before an irreversible process
Before a covering process

2. At the end of the process:

Finished products
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Examples of Inspection Points
Type of Inspection Characteristics
business points
Fast Food Cashier Accuracy
Counter area Appearance, productivity
Eating area Cleanliness
Building Appearance
Kitchen Health regulations
Hotel/motel Parking lot Safe, well lighted
Accounting Accuracy, timeliness
Building Appearance, safety
Main desk Waiting times
Supermarket Cashiers Accuracy, courtesy
Deliveries Quality, quantity
Similar to Table 10-1
10
Inspection Costs
The amount of inspection is optimal when the sum of
the costs of inspection and passing defectives is
minimized.

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Centralized vs. On-Site Inspection

Are the advantages of specialized lab tests

worth the time and interruption?

On-Site In Lab
▪ Immovable product ▪ specialized equipment,
(e.g. ship) ▪ Skilled quality control
▪ Simple or handheld inspectors,
measuring ▪ More favourable test
equipment environment
▪ Automated
inspection
12
Why we perform inspection?
▪ To identify defect of error in a process/system

What is the difference between defect and defective?

A defect is a abnormal condition in a unit. Defective
refers to a whole unit with single or multiple defects.
Example: A defective car unit with 3 types of defect.

13
(SPC) Statistical Process Control

Statistical Process Control:

Statistical evaluation of the product during production
1. Types of Variations
2. Sampling and Sampling Distributions
3. Control Charts & Their Design
4. Sample Mean and Range Control Charts
5. Individual Unit, Moving Range Control Charts
6. Control Charts for Attributes.
7. Run Tests and Using Control Charts

14
Statistical Process Control (SPC) Steps

Take periodic
samples from
process

Compare to
predetermined
limits

If outside limits,
stop process and If inside limits,
take corrective continue process
action

15
Types of Variations
• Random variation: Natural variations in the output of
process, created by countless minor factors.
• Assignable variation: A variation whose source can be
identified.

Main task of
SPC is to
distinguish
assignable from
random
variation

Figure 10-4
16
2 types of variations

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Normal Distribution

Only a small percentage of sample means fall more

than 2 or 3 standard deviations from the process
mean.
Figure 10-6
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Control Chart

▪ Purpose: to monitor process output to

distinguish between random and assignable
variation
▪ A time-ordered plot of sample statistics (e.g.
means) obtained from an ongoing process
▪ Upper and lower control limits define the
range of acceptable variation

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Control Chart

Figure 10-7
20
Control Limits
The dividing lines between random and assignable
deviations from the process mean.
Control
• limits
Sampling
are set at 2 or 3
distribution
standard
deviations of the
process mean. Process
distribution

Process
Mean

Lower Upper
control control
limit limit
21
Type I and Type II Error
Type I error: concluding
that a process has Type II error:
changed (assignable concluding a process
variation) when it has not. is in control when it
is actually not
(assignable variation
is present).

Figure 10-9

22
Type I and Type II Errors

In control Out of control

Type I error
In control No Error
(producer’s risk)
Out of Type II Error
No error
control (consumer’s risk)

Table 10-2

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Observations from Sample Distribution

Each sample mean (a red dot) is compared to the

control limits.

Figure 10-10

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Designing Control Charts
1. Determine a sample size

2. Obtain 20 to 25 samples

3. Establish and graph preliminary control limits

4. Plot sample statistic values on control chart

5. Are any points outside control limits (CL)?

a. NO b. YES
Assume no assignable cause Investigate and correct
Process is in control Process is out of control
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Choosing an attribute control charts

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Choosing an attribute control charts

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NP charts

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NP charts example

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NP charts example

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P charts

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P charts example

32
P charts example

33
P charts example

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C charts

35
C charts example

36
C charts example

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C charts example

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U charts

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U charts example

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U charts example

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U charts example

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Control Charts for Variables
Variables generate data that are measured.

▪ Sample Mean control charts

• Used to monitor the mean (centre) of a
process.
• X-bar charts

▪ Sample Range control charts

• Used to monitor the process dispersion
(variation)
• R charts
43
X-bar and R Charts examples

44
X-bar and R Charts examples

45
X-bar and R Charts examples

46
X-bar and R Charts examples

47
X-bar and R Charts examples

48
Upper and Lower Control Limits for
Sample Mean Chart

UCLx = X + z x
LCL x = X − z x
where
x = Standard

deviation of sampling distribution of sample
means =
n
 = Process standard deviation
n = Sample size
z = Standard Normal deviate (usually z = 3)
x = Average of sample means = grand mean
49
 Upper and Lower Control Limits for
Sample Mean Chart
Alternate Method
UCLx = X + A2 R
LCL x = X − A2 R
where
A2 can be obtained from Table 10–3
R = Average of sample ranges
Sample range = (maximum value – minimum value) in the
sample
x = Average of sample means = grand mean

50
Example: Control Chart
Twenty samples of n = 8 have been taken of the weight
of a part. The average of sample ranges for the 20
samples is .016kg, and the average of sample means is
3kg. Determine three sigma control limits for sample
mean of this process.

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Example: Control Chart
n A2 D3 D4
Twenty samples of n = 8 have been 2 1.88 0 3.27
taken of the weight of a part. The 3 1.02 0 2.57
average of sample ranges for the 20 4 0.73 0 2.28
samples is .016kg, and the average of 5 0.58 0 2.11
6 0.48 0 2.00
sample means is 3kg. Determine three 7 0.42 0.08 1.92
sigma control limits for sample mean of 8 0.37 0.14 1.86
this process. 9 0.34 0.18 1.82

Solution 10
11
0.31
0.29
0.22
0.26
1.78
1.74

x = 3, R = .016, A2 = .37(for n = 8, from Table (10 - 3)

𝑈𝐶𝐿𝑥ҧ = 𝑥Ӗ + 𝐴2 𝑅ത = 3 + .37 .016 = 3.006𝑘𝑔

𝐿𝐶𝐿𝑥ҧ = 𝑥Ӗ − 𝐴2 𝑅ത = 3 − .37 .016 = 2.994𝑘𝑔

Example 10-3
52
Upper and Lower Control Limits for
Sample Range Control Chart
Sample range (R) control chart: the control
chart for sample range, used to monitor process
dispersion or spread.

UCLR = D4 R
LCL R = D3 R

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Example: Control Chart
n A2 D3 D4
Twenty-five samples of n=10 2 1.88 0 3.27
observations have been taken from a 3 1.02 0 2.57
milling process. The average of sample 4 0.73 0 2.28
5 0.58 0 2.11
ranges is .01 centimetre. Determine
6 0.48 0 2.00
upper and lower control limits for 7 0.42 0.08 1.92
sample range. 8 0.37 0.14 1.86
9 0.34 0.18 1.82
10 0.31 0.22 1.78
11 0.29 0.26 1.74
Solution
R = .01cm, D3 = .22 D4 = 1.78(for n = 10, from Table)

UCLR = 1. 78(.01) = 0.0178cm

LCLR = 0.22(.01) = 0.0022cm
Example 10-4
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Example:
Sample Mean and Range Charts
Data from 15 samples each with 5 observations.
O b s e r va ti o n
S a m p le 1 2 3 4 5
1 1 0 .6 8 1 0 .6 9 1 0 .7 8 1 0 .8 0 1 0 .7 1
2 1 0 .7 9 1 0 .8 6 1 0 .6 0 1 0 .7 5 1 0 .7 8
3 1 0 .7 8 1 0 .6 7 1 0 .8 4 1 0 .7 9 1 0 .7 2
4 1 0 .5 9 1 0 .7 3 1 0 .8 1 1 0 .7 8 1 0 .7 3
5 1 0 .6 9 1 0 .7 1 1 0 .7 9 1 0 .7 6 1 0 .6 7
6 1 0 .7 5 1 0 .7 1 1 0 .7 4 1 0 .7 2 1 0 .6 1
7 1 0 .7 9 1 0 .7 1 1 0 .6 9 1 0 .8 8 1 0 .6 0
8 1 0 .7 4 1 0 .7 8 1 0 .1 1 1 0 .7 4 1 0 .7 5
9 1 0 .7 7 1 0 .7 7 1 0 .6 4 1 0 .6 4 1 0 .7 3
10 1 0 .7 2 1 0 .6 7 1 0 .7 1 1 0 .8 5 1 0 .7 1
11 1 0 .7 9 1 0 .8 2 1 0 .7 6 1 0 .6 6 1 0 .7 1
12 1 0 .6 2 1 0 .8 0 1 0 .8 2 1 0 .8 7 1 0 .7 3
13 1 0 .6 6 1 0 .8 2 1 0 .8 9 1 0 .5 4 1 0 .7 5
14 1 0 .8 1 1 0 .7 5 1 0 .8 6 1 0 .8 0 1 0 .7 0
15 1 0 .6 6 1 0 .6 8 1 0 .6 4 1 0 .7 5 1 0 .7 3

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Example:
Sample Mean and Range Charts
Calculate sample means, sample ranges,
grand mean, and average of sample ranges.
Observations
Sample 1 2 3 4 5 Mean Range
1 10.68 10.69 10.78 10.80 10.71 10.73 0.12
2 10.79 10.86 10.60 10.75 10.78 10.75 0.26
3 10.78 10.67 10.84 10.79 10.72 10.76 0.17
4 10.59 10.73 10.81 10.78 10.73 10.73 0.22
5 10.69 10.71 10.79 10.76 10.67 10.72 0.12
6 10.75 10.71 10.74 10.72 10.61 10.71 0.14
7 10.79 10.71 10.69 10.88 10.60 10.73 0.27
8 10.74 10.78 10.11 10.74 10.75 10.62 0.67
9 10.77 10.77 10.64 10.64 10.73 10.71 0.13
10 10.72 10.67 10.71 10.85 10.71 10.73 0.18
11 10.79 10.82 10.76 10.66 10.71 10.75 0.16
12 10.62 10.80 10.82 10.87 10.73 10.77 0.25
13 10.66 10.82 10.89 10.54 10.75 10.73 0.35
14 10.81 10.75 10.86 10.80 10.70 10.78 0.16
15 10.66 10.68 10.64 10.75 10.73 10.69 0.10
Averages 10.73 0.22
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Example:
Sample Mean and Range Charts
Determine Control Limits
From Table 10-3
x Chart Control Limits Choose factor for sample size

UCL = x + A 2 R n A2 D3 D4
2 1.88 0 3.27
3 1.02 0 2.57
LCL = x - A 2 R 4 0.73 0 2.28
5 0.58 0 2.11
6 0.48 0 2.00
R Chart Control Limits 7 0.42 0.08 1.92
8 0.37 0.14 1.86
UCL = D 4 R 9 0.34 0.18 1.82
10 0.31 0.22 1.78
11 0.29 0.26 1.74
LCL = D 3 R

57
Example:
Sample Mean and Range Charts
Create x-bar Chart and Plot Values
UCL = x + A 2 R = 10.728 + .58(0.2204) = 10.856
LCL = x - A 2 R = 10.728 - .58(0.2204) = 10.601

10.800 UCL
10.780
10.760
10.740
10.720
Means

10.700
10.680
10.660
10.640
10.620
10.600 LCL
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Sample
58
Example:
Sample Mean and Range Charts
Create R-chart and Plot Values
UCL = D4 R = ( 2.11)( 0.2204 ) = 0.46504
LCL = D3 R = (0)( 0.2204 ) = 0
0 .8 0 0

0 .7 0 0

0 .6 0 0

0 .5 0 0
UCL
R 0 .4 0 0

0 .3 0 0

0 .2 0 0

0 .1 0 0
LCL
0 .0 0 0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
S a m p le

59
Sample Mean and Range Charts

Figure 10-11A.
60
 Sample Mean and Range Charts

The Sample Mean Control Chart is sensitive to shifts in the process mean
whereas, Sample Range Control Chart is sensitive to changes in process
dispersion or spread. Because of these different perspectives, both charts must
be Figure 10-11B
used to monitor the process. 61
Individual Unit Control Charts

Individual unit (X) control chart

Used to monitor single observations ( n = 1)

𝑈𝐶𝐿𝑥 = 𝑋ത + 𝑧𝜎

𝐿𝐶𝐿𝑥 = 𝑋ത − 𝑧𝜎
where
 = Process standard deviation
z = Standard Normal deviate (usually z = 3)
𝑋ത = Average of individual observations (estimate of process
mean)

62
Example: Control Chart

63
Example: Control Chart

25
n = 200 p= = .0096
13( 200)

p (1 − p ) = .0096  2
.0096(.9904)
Control Limits = p2
n 200

= .0096  .0138

Thus, UCL is .0234 and LCL is 0 (because it can't be negative).

Because n = 200, the fraction represented by each data point is half the amount shown.
E.g., 1 defective = .005, 2 defectives = .01, etc.
Sample 10’s proportion is too large (3. 4% > 2.34%). Therefore, the process is not in control.

64
Example: Control Chart

a. −
c = 21 / 14 = 1.5
Control Limits: c  3 c = 1.5  3 1.5 = 1.5 ± 3.67
UCL is 5.17, LCL, being negative, should be changed to 0.
Yes, the process is in control because all number of defects are within these control
limits.
b. No, there is no evidence for change in the process because 0 ≤ 5 ≤ 5.17.

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Example: Control Chart

a. −
c = 21 / 14 = 1.5
Control Limits: c  3 c = 1.5  3 1.5 = 1.5 ± 3.67
UCL is 5.17, LCL, being negative, should be changed to 0.
Yes, the process is in control because all number of defects are within these control
limits.
b. No, there is no evidence for change in the process because 0 ≤ 5 ≤ 5.17.

66
Control Charts for Attributes

▪ p-Chart - Control chart used to monitor the

proportion of defectives in a process.
▪ c-Chart - Control chart used to monitor the
number of defects per unit.
Control charts for attributes are used when the process
characteristic is counted rather than measured.

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Control Charts for Attributes
▪ p-Chart – for sample proportion of defectives
in a process
▪ c-Chart – for the number of defects per unit
p(1 − p )
p =
n

UCL p = p + z p UCLc = c + z c
LCL p = p − z p LCL c = c − z c
68
Control Charts for Attributes

p(1 − p )
p =
n
UCL p = p + z p UCLc = c + z c
LCL p = p − z p LCL c = c − z c
69
Control Charts for Attributes

70
Control Charts for Attributes

71
Use of p-Charts
▪ When observations can be placed into two
categories.
• Good or bad
• Pass or fail
• Operate or don’t operate
▪ When the data consists of multiple
samples of several observations each.
▪ Sample proportion of defectives.

72
Use of c-Charts
Use only when number of occurrences per
unit of measure can be counted; non-
occurrences cannot be counted.
• Scratches, chips, dents, or errors per item
• Cracks or faults per unit of distance
• Breaks or tears per unit of area
• Bacteria or pollutants per unit of volume
• Calls, complaints, failures per unit of time

73
Managerial Considerations Concerning
Control Charts
1. At what points in the process to use control
charts?
2. What size samples to take?
3. What type of control chart to use (i.e.,
variables or attribute)?
4. How often samples should be taken?

74
Process Capability
Three terms relate to the process capability:
▪ Design specifications
• Range of acceptable values established by
engineering design or customer requirements
▪ Process variability
• Natural variability in a process
▪ Process capability
• Ability of a process to meet the design
specification 75
Process Capability Indices

Process capability ratio= specification width

process width
If the process is centered use Cp

Cp = Upper specification – lower specification

6
If the process is not centered use Cpk
Smaller of:
Process mean – Lower specification and Upper specification – Process mean
3 3

76
Capability Example
The design specification for the width of a part is between 101 mm and
101.8 mm (= .8 mm). Which of these machines are capable?

Standard Machine Machine

Machine Deviation Variability Capability
 6 Cp = spec/6
A 0.13 0.78 0.80/0.78 = 1.03

B 0.08 0.48 0.80/0.48 = 1.67

C 0.16 0.96 0.80/0.96 = 0.83
Cp > 1.33 is desirable
Cp = 1.00 process is barely capable
Cp < 1.00 process is not capable 77
77
Process Capability Analysis

Figure 10-16
78
Capability Analysis
Capable = process output falls within specifications.

▪ If incapable:
1. Redesign process or reduce variability
2. Use alternative process
3. Use 100-percent inspection
4. Examine/relax design specification

79
Process Capability Example:
Cookie Packages
▪ A company creates small packages of cookies in a 16
gram package. Government standards state that
weights must be within ± 5 percent of the weight
advertised on the package.
▪ The design specifications are:
Upper design specification = 16 + .05(16) = 16.8 grams
Lower design specification = 16 – .05(16) = 15.2 grams
▪ Inspectors test 1,000 packages of cookies and find an
average weight of 15.875 grams with a standard
deviation of .529 grams.
Is the process capable?

80
Process Capability Example:
Cookie Packages
▪ Specification Limits
• Upper Spec = 16.8 g What is the Cp index for
• Lower Spec = 15.2 g this process?
▪ Observed Weight
• Mean = 15.875 g
• Std Dev = .529 g

15.875 − 15.2 16.8 − 15.875 

C pk = Min ; 
 3(.529) 3(.529) 
C pk = Min.4253; .5829 C pk = .4253

81
What does a Cpk of .4253 mean?

▪ An index that shows how well the units being

produced fit within the specification limits.
▪ Process considered capable if Cpk  1.
▪ This process will produce a relatively high
number of defects.
▪ Many companies look for a Cpk of 1.3 or better…
Six-Sigma companies want 2.0!
Bigger is
Better!

82
Six Sigma Quality
Goal: achieving process variability so small that the half-width
of design specification equals six standard deviations of the
process.
• Cpk = 2.00 = only 3.4 units per million outside design
specification

Figure 10-17
83
Concept Check
A methodology that is used to show how well
parts being produced fit into a range specified
by design limits is ….?
Answer: a.
a) Capability analysis Capability
b) Six Sigma
analysis
c) Range Chart
d) Mean Chart
e) None of the above

84
Concept Check
You want to prepare a p-chart and you
observe 200 samples with 10 in each, and
find 5 defective units. What is the resulting
“proportion defective”?
a) 25
b) 2.5
c) 0.0025
d) 0.00025
e) Can not be computed on data above

Answer: c. 0.0025 (5/(200x10)=0.0025)

85
Concept Check
You want to prepare an x-bar chart. If the number of
observations in a “subgroup” is 10, what is the
appropriate “factor” used in the computation of the
UCL and LCL?
a) 1.88
b) 0.31
c) 0.22
d) 1.78
e) None of the above

Answer: b. 0.31 (from Table 10-3)

86
Concept Check
You want to prepare an R chart. If the
number of observations in a sample is 5, what
is the appropriate “factor” used in the
computation of the LCL?
a) 0
b) 0.88
c) 1.88 Answer: a. 0
d) 2.11 (from Table 10-3)
e) None of the above

87
Summary
▪ Statistical process control and control charts focus on detecting
departures from stability in a process.
▪ Variation types are random and assignable.
▪ Sample mean control charts are used to monitor the process mean.
▪ Sample range control charts are used to monitor process dispersion or
spread.
▪ Individual unit X control charts are used for single observations (n =
1).
▪ Moving range control charts monitor the dispersion or spread of the
differences between consecutive observations.
▪ p-charts are used to monitor the proportion of defective items.
▪ c-charts are used to monitor the number of defects per unit product.
▪ If a sample statistic falls outside control limits or its series has a
pattern, then the process is out of control.
▪ Run test is used to determine if a nonrandom pattern exists.
88
Learning Checklist
 Briefly explain the statistical process control
(SPC) process.
 Explain how control charts are designed and the
concepts that underlie their use.
 Select and create an appropriate SPC charts.
 Explain the use of capability analysis.
 Analyze the capability of a process.
 Describe Six Sigma quality.
 Explain how design of experiments can be used to
improve processes.
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The end

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