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An online shopping website ships on average 11,000 orders each day. At the present time, about 5 out of 1000 orders that are shipped are shipped with the incorrect merchandise. As part of an effort to reduce errors in the fulfillment of orders, robots have been inserted into the process of filling orders. You will monitor the proportion of incorrect orders discovered each day and determine if the robots improve the process. What type of control chart will you use? What are the initial center line and control limits? If there has been an improvement, what do you expect to see on the control chart?

Short Answer

Expert verified
Use a P-chart. Initial center line is 0.005; control limits are 0.00701 and 0.003. Expect lower error rates on the chart for improvement.

Step by step solution

01

Understand the Data and Objective

We are dealing with an online shopping website that processes 11,000 orders per day and has an error rate of 5 incorrect orders per 1000. The objective is to monitor if robots reduce these errors, by using control charts.
02

Choose the Correct Type of Control Chart

Since the goal is to monitor the proportion of defective or incorrect orders, a P-chart (proportion chart) is appropriate. P-charts are used for quality control when data is in the form of proportions or percentages.
03

Determine the Initial Center Line

The center line of a P-chart is the average proportion of defects. Calculate the average defect rate: \( p = \frac{5}{1000} = 0.005 \). Therefore, the center line is \( p = 0.005 \).
04

Calculate Control Limits

For the control limits of a P-chart, use the formula: \( \text{Upper Control Limit (UCL)} = p + 3\sqrt{\frac{p(1-p)}{n}} \) and \( \text{Lower Control Limit (LCL)} = p - 3\sqrt{\frac{p(1-p)}{n}} \), where \( n \) is the number of orders per day, 11,000. Calculate: \( \sqrt{\frac{0.005(1-0.005)}{11000}} = 0.00067 \) Thus, \( \text{UCL} = 0.005 + 3 \times 0.00067 = 0.00701 \) and \( \text{LCL} = 0.005 - 3 \times 0.00067 = 0.003 \).
05

Interpret What Improvement Would Look Like on the Chart

If there is an improvement due to the use of robots, the proportion of incorrect orders should decrease. Thus, we would expect the proportion of errors to consistently fall below the center line (0.005) and remain within the control limits.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

P-chart
When it comes to monitoring a process that involves proportions or percentages, the P-chart (or proportion chart) is an essential tool in the field of quality control. This chart is particularly useful for processes like our online shopping site scenario, where the goal is to track the proportion of incorrect orders over time. The P-chart helps to visualize how a specific proportion behaves and identifies any variations in that proportion.

It captures fluctuations in data by displaying upper and lower control limits, beyond which any data point is considered an anomaly. By using a P-chart, managers and quality control analysts can easily identify patterns and determine if the process is functioning within acceptable limits.
  • P-charts are used when outcomes are classified into success or failure categories.
  • They are ideal for evaluating data where each unit is either defective or not.
  • It can be used to monitor day-to-day or week-to-week changes in error rates.
Quality Control
Quality control is a fundamental practice used to ensure that the products and services a company offers maintain a certain level of standard. In the context of our exercise, the online shopping platform uses quality control to minimize the incorrect merchandise being shipped. Integrating robots into this system aims to enhance this process by reducing human errors during order fulfillment.

Quality control involves various tools and techniques to monitor different aspects of production and shipping processes, ensuring consistency and accuracy. A P-chart is an example of such a tool, which allows companies to spot deviations in the process quickly.
  • Helps in maintaining product reliability and customer satisfaction.
  • Employs statistical tools to detect and rectify areas of concern.
  • Contributes to continuous process improvement.
Error Rate Monitoring
Keeping an eye on error rates is crucial for any business that strives to deliver high-quality service consistently. The exercise focuses on monitoring the rate at which errors occur in shipping processes through statistical quality control methods. Error rate monitoring is about measuring the frequency of defects and using that data to enhance the process.

It keeps track of whether quality is improving, especially with changes like the addition of robots. Using a P-chart for error rate monitoring allows organizations to systematically observe changes over time, respond quickly to inconsistencies, and implement changes when necessary.
  • Helps identify trends, shifts, or cycles in error occurrences.
  • Essential for proactive quality management and rectifying issues early.
  • Improvement is indicated by a consistent reduction in error frequencies.
Control Limits Calculation
The calculation of control limits in a P-chart is an integral part of understanding whether a process is under control or not. In our example, the upper and lower control limits provide a boundary for what is considered normal variation. These limits are computed using the formula that takes into account the average proportion of defects and order size.

The upper control limit (UCL) and lower control limit (LCL) are calculated at three standard deviations from the mean in both directions, capturing a 99.7% confidence interval for the data. A point outside these limits suggests a potential issue in the process that may require corrective actions.
To compute these:
  • Determine the average defect proportion, noted as \( p \).
  • Calculate the standard deviation for a proportion using \( \sqrt{\frac{p(1-p)}{n}} \).
  • Multiply the standard deviation by three and add to/subtract from the average to find UCL and LCL.
  • Check for consistency within these limits as a sign of a stable process.

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Most popular questions from this chapter

Is each of the following examples of a special cause most likely to first result in (i) one-point-out on the \(s\) or \(R\) chart, (ii) one-point-out on the \(\mathrm{x}^{-} \bar{x}\) chart, or (iii) a run on the \(\mathrm{x}^{-} \bar{x}\) chart? In each case, briefly explain your reasoning. (a) The time it takes a new coffee barista to complete your order at your favorite coffee shop. (b) The precision of a measurement tool is affected by dirt getting on the sensors and needs to be cleaned when this happens. (c) The accuracy of an inspector starts to degrade after the first six hours of his shift. (d) A person who is training for a \(5 \mathrm{k}\) race created a control chart for her running time on the same route each week. She started running at what she considered a slow pace and is now very happy with her running times.

The computer makers who buy monitors require that the monitor manufacturer practice statistical process control and submit control charts for verification. This allows the computer makers to eliminate inspection of monitors as they arrive, a considerable cost saving. Explain carefully why incoming inspection can safely be eliminated.

The quality guru W. Edwards Deming (1900-1993) taught (among much else) that \({ }^{16}\) (a) "People work in the system. Management creates the system." (b) "Putting out fires is not improvement. Finding a point out of control, finding the special cause and removing it, is only putting the process back to where it was in the first place. It is not improvement of the process." (c) "Eliminate slogans, exhortations and targets for the workforce asking for zero defects and new levels of productivity." (d) "No one can guess the future loss of business from a dissatisfied customer. The cost to replace a defective item on the production line is fairly easy to estimate, but the cost of a defective item that goes out to a customer defies measure." Choose one of these sayings. Explain carefully what facts about improving quality the saying attempts to summarize.

What type of control chart or charts would you use as part of efforts to improve each of the following performance measures in an online business information systems department? Explain your choices. (a) Website availability (b) Time to respond to requests for help (c) Percent of website changes not properly documented

If the mesh tension of individual monitors follows a Normal distribution, we can describe capability by giving the percent of monitors that meet specifications. The old specifications for mesh tension are \(100-400 \mathrm{mV}\). The new specifications are \(150-350 \mathrm{mV}\). Because the process is in control, we can estimate that tension has mean \(275 \mathrm{mV}\) and standard deviation \(38.4 \mathrm{mV}\). (a) What percent of monitors meet the old specifications? (b) What percent meet the new specifications?

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