INDUSTRIAL STATISTICS INDUSTRIAL STATISTICS Practical Methods and Guidance for Improved Performance ANAND M. JOGLEKAR Joglekar Associates Plymouth, Minnesota Copyright(cid:2)2010byJohnWiley&Sons,Inc.Allrightsreserved. PublishedbyJohnWiley&Sons,Inc.,Hoboken,NewJersey. PublishedsimultaneouslyinCanada. Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinany formorbyanymeans,electronic,mechanical,photocopying,recording,scanning,orotherwise, exceptaspermittedunderSection107or108ofthe1976UnitedStatesCopyrightAct,withouteither thepriorwrittenpermissionofthePublisher,orauthorizationthroughpaymentoftheappropriate per-copyfeetotheCopyrightClearanceCenter,Inc.,222RosewoodDrive,Danvers,MA01923, 978-750-8400,fax978-750-4470,oronthewebatwww.copyright.com.RequeststothePublisher forpermissionshouldbeaddressedtothePermissionsDepartment,JohnWiley&Sons,Inc., 111RiverStreet,Hoboken,NJ07030,201-748-6011,fax201-748-6008,oronlineat http://www.wiley.com/go/permissions. 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Wileyalsopublishesitsbooksinavarietyofelectronicformats.Somecontentthatappearsinprint maynotbeavailableinelectronicbooks.FormoreinformationaboutWileyproducts,visitour websiteatwww.wiley.com LibraryofCongressCataloging-in-PublicationData: Joglekar,AnandM. Industrialstatistics:practicalmethodsandguidanceforimproved performance/AnandM.Joglekar. p.cm. Includesbibliographyreferencesandindex. ISBN978-0-470-49716-6(cloth) 1. Processcontrol–Satisticalmethods.2. Qualitycontrol–Statistical methods.3.Experimentaldesign.I. Title. TS156.8.J622010 658.5072’7–dc22 2009034001 PrintedintheUnitedStatesofAmerica 10 9 8 7 6 5 4 3 2 1 To thememoryof myparents andto Chhayaand Arvind Thefollowingage-oldadvicedealswithrobustdesignandcontinuousimprovement atthepersonallevel. Youhavecontroloveryouractions,butnotontheirfruits. Youshouldneverengageinactionforthesakeofreward, norshouldyoulongforinaction. Performactionsinthisworldabandoningattachments andalikeinsuccessorfailure, foryogaisperfectevennessofmind. –BhagavadGita2.47–48 MahatmaGandhiencapsulatesthecentralmessageofGitainonephrase:nishkama karma,selflessaction,workfreefromselfishdesires.Desireisthefueloflife;without desirenothingcanbeachieved.Kama,inthiscontext,isselfishdesire,thecompulsive cravingforpersonalsatisfactionatanycost.Nishkamaisselflessdesire.Karmameans action.Gitacounsels—workhardintheworldwithoutanyselfishattachmentandwith evennessofmind. Mahatma Gandhi explains—By detachment I mean that you must not worry whether the desired result follows from your action or not, so long as your motive ispure,yourmeanscorrect.Itmeansthatthingswillcomerightintheendifyoutake careofthemeans.Butrenunciationoffruitinnowaymeansindifferencetoresults.In regardtoeveryactiononemustknowtheresultthatisexpectedtofollow,themeans theretoandthecapacityforit.Hewho,beingsoequipped,iswithoutselfishdesirefor theresultandisyetwhollyengrossedintheduefulfillmentofthetaskbeforehim,is saidtohaverenouncedthefruitsofhisaction.Onlyapersonwhoisutterlydetached andutterlydedicatedisfreetoenjoylife.Renounceandenjoy! –AdaptedfromBhagavadGitabyEknathEaswaran CONTENTS PREFACE xi 1. BASICSTATISTICS: HOW TO REDUCE FINANCIALRISK? 1 1.1. Capital MarketReturns / 2 1.2. Sample Statistics / 5 1.3. PopulationParameters / 9 1.4. ConfidenceIntervals and Sample Sizes / 13 1.5. Correlation / 16 1.6. Portfolio Optimization / 18 1.7. Questions toAsk / 24 2. WHYNOT TODO THE USUAL t-TEST AND WHATTO REPLACE ITWITH? 27 2.1. What isat-Test and what isWrong with It? / 29 2.2. ConfidenceInterval isBetter Than at-Test / 32 2.3. HowMuch Data toCollect? / 35 2.4. Reducing Sample Size / 39 2.5. Paired Comparison / 41 2.6. Comparing TwoStandard Deviations / 44 vii viii CONTENTS 2.7. Recommended Design and AnalysisProcedure / 46 2.8. Questions toAsk / 46 3. DESIGN OFEXPERIMENTS: ISIT NOT GOING TO COST TOO MUCHANDTAKE TOO LONG? 48 3.1. Why Design Experiments? / 49 3.2. Factorial Designs / 53 3.3. SuccessFactors / 59 3.4. Fractional Factorial Designs / 63 3.5. Plackett–Burman Designs / 66 3.6. Applications / 67 3.7. Optimization Designs / 71 3.8. Questions toAsk / 75 4. WHATIS THE KEY TODESIGNING ROBUST PRODUCTS AND PROCESSES? 77 4.1. The Keyto Robustness / 78 4.2. Robust Design Method / 83 4.3. Signal-to-Noise Ratios / 87 4.4. Achieving Additivity / 89 4.5. AlternateAnalysis Procedure / 92 4.6. Implications for R&D / 98 4.7. Questions toAsk / 100 5. SETTING SPECIFICATIONS: ARBITRARY ORIS THERE A METHOD TO IT? 101 5.1. Understanding Specifications / 103 5.2. EmpiricalApproach / 106 5.3. FunctionalApproach / 107 5.4. MinimumLife Cycle Cost Approach / 114 5.5. Questions toAsk / 119 6. HOW TO DESIGN PRACTICAL ACCEPTANCESAMPLING PLANSAND PROCESS VALIDATION STUDIES? 121 6.1. Single-Sample Attribute Plans / 123 6.2. Selecting AQLand RQL / 129
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