In: Operations Management
QUESTION #10:
Consider a process by which coils are manufactured. Samples of size n = 5 are randomly selected from the process, and the resistance values (in ohms) of the coils are measured for 25 subgroups (samples). The data values are given in the following table.
| 
 Sample  | 
 x1  | 
 x2  | 
 x3  | 
 x4  | 
 x5  | 
| 
 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25  | 
 20 19 25 20 19 22 18 20 21 21 20 22 19 20 20 21 20 20 20 22 23 21 21 20 19  | 
 22 18 18 21 24 20 20 18 20 19 20 21 22 21 24 20 18 24 19 21 22 18 24 22 20  | 
 21 22 20 22 23 18 19 23 24 20 23 20 19 22 24 24 18 22 23 21 22 18 24 21 21  | 
 23 20 17 21 22 18 18 20 23 20 22 22 18 21 23 20 20 23 20 24 20 17 23 21 21  | 
 22 20 22 21 20 19 20 21 22 20 20 23 19 22 23 21 20 23 19 22 22 19 23 20 22  | 
(a)

Sample size (n) = 5, using the standard 3-sigma tables for X-bar/ R chart, we get A2 = 0.577, D3 = 0, D4 = 2.114
X-bar chart:
UCLx = X_double-bar + A2 * R-bar = 20.84 + 0.577 * 3.48 =
22.85
CLx = X_double-bar = 20.84
LCLx = X_double-bar - A2 * R-bar = 20.84 - 0.577 * 3.48 = 18.83
Range Chart:
UCLr = D4 * R-bar = 2.114 * 3.48 = 7.357
CLr = R-bar = 3.48
LCLr = D3 * R-bar = 0.000 * 3.48 = 0.000
(b)

The process is out of control for sample 22 and 23 in the mean chart and sample 3 in the range chart.
(c)
Remove sample 3, 22, and 23 and recalculated the mean and range chart UCL and LCL as follows:

X-bar chart:
UCLx = X_double-bar + A2 * R-bar = 20.864 + 0.577 * 3.273 =
22.75
CLx = X_double-bar = 20.86
LCLx = X_double-bar - A2 * R-bar = 20.864 - 0.577 * 3.273 =
18.98
Range Chart:
UCLr = D4 * R-bar = 2.114 * 3.273 = 6.92
CLr = R-bar = 3.27
LCLr = D3 * R-bar = 0.000 * 3.273 = 0.000

The revised chart contains just one point (sample-14) outside the limit in the mean chart marginally.
(d)
Process mean (μ) is estimated by the X_double-bar i.e.
20.86
Process stdev (σ) = R-bar / d2
The coefficient d2 is to be noted from the standard table and will be equal to 2.326 for n=5.
So,
σ = 3.27 / 2.326 = 1.41
(e)
USL = 21 + 3 = 24
LSL = 21 - 3 = 18
μ = 20.86
σ = 1.41
Prob{LSL < Output < USL} = Prob(Output < USL} - Prob{Output < LSL}
= NORM.DIST(24, 20.86, 1.41, 1) - NORM.DIST(18, 20.86, 1.41, 1)
= 0.966
So, Proportion non-conforming = 1 - Prob{LSL < Output < USL} = 1 - 0.966 = 0.034
(f)
Prob{Output < LSL} = NORM.DIST(18, 20.86, 1.41, 1) = 0.021
So, expected number of loss = 0.021 * 10,000 = 210 units
So, cost of scrap per day = 210 * $0.50 = $105