National Institute of Technology Agartala

Department of Mathematics

Lecture Note number 06

On
Operations Research for MBA 2nd Semester

The following topics I will teach you and rest of the syllabus will be covered by Dr. Abhijit Baidya Sir.

1. Layout designing, product, process & cellular layout, assembly line balancing, service layouts.
2. Aggregate plans and master production schedules, MRP, MRP II, lot-sizing, MPS, operations scheduling,
priority rules & techniques, work centre & personnel scheduling.
3. Inventory management, types, models, systems, inventory control.
4. Fundamentals of quality management, TQM philosophy, introduction to six-sigma
5. Design and use SQC charts, process capability, x-bar, R, p and c-charts, acceptance sampling.
6. Facets of world class manufacturing, lean manufacturing aspects

1. Explain the term Statistical Quality Control.

Statistical process control (SPC) involves using statistical techniques to measure and analyze the variation in
processes. Most often used for manufacturing processes, the intent of SPC is to monitor process quality and
maintain processes to fixed targets. SPC is used to monitor the consistency of processes used to manufacture a
product as designed. It aims to get and keep processes under control. No matter how good or bad the design, SPC
can ensure that the product or service is being produced as designed and intended. Thus, SPC will not improve a
poorly designed product's reliability, but can be used to maintain the consistency of how the product is made and,
therefore, of the manufactured product itself and its as-designed reliability.

Examples include randomly testing a certain number of computers from a batch to make sure they meet
operational requirements, and randomly inspecting snowboards to make sure that they are not defective.

Statistical process control (SPC) involves the following parts:

 Calculate basic statistical measures

 Construct control charts
 Develop sampling plans
 Explain process capability

2. What is X-bar and range chart.

An X-bar and R (range) chart is a pair of control charts used with processes that have a subgroup size of two
or more. The standard chart for variables data, X-bar and R charts help determine if a process is stable and
predictable. The X-bar chart shows how the mean or average changes over time and the R chart shows how the
range of the subgroups changes over time. It is also used to monitor the effects of process improvement theories.
As the standard, the X-bar and R chart will work in place of the X-bar and s or median and R chart.

3. What is X-bar and range chart.

The use X-bar and R charts for any process with a subgroup size greater than one. Typically, it is used when
the subgroup size falls between two and ten, and X-bar and s charts are used with subgroups of eleven or more.
Use X-bar and R charts can be used when the following questions have a solution:
 Do you need to assess system stability?
 Is the data in variables form?
 Is the data collected in subgroups larger than one but less than eleven?
  Is the time order of subgroups preserved?

4. What is the use X-bar and range chart?

Collect as many subgroups as possible before calculating control limits. With smaller amounts of data, the X-
bar and R chart may not represent variability of the entire system. The more subgroups you use in control limit
calculations, the more reliable the analysis. Typically, twenty to twenty-five subgroups will be used in control limit
calculations.

Use X-bar and R charts to analyze the results of process improvements. Use X-bar and R charts
for standardization. This means we should continue collecting and analyzing data throughout the process operation.
If we made changes to the system and stopped collecting data, we would have only perception and opinion to tell
whether the changes actually improved the system. Without a control chart, there is no way to know if the process
has changed or to identify sources of process variability.

5. What is Acceptance Sampling?

Contributions of Dodge and Romig to acceptance sampling :

Acceptance sampling is an important field of statistical quality control that was popularized by Dodge and
Romig and originally applied by the U.S. military to the testing of bullets during World War II. If every bullet was
tested in advance, no bullets would be left to ship. If, on the other hand, none were tested, malfunctions might
occur in the field of battle, with potentially disastrous results

Definintion of Lot Acceptance Sampling

Dodge reasoned that a sample should be picked at random from the lot, and on the basis of information that
was yielded by the sample, a decision should be made regarding the disposition of the lot. In general, the decision
is either to accept or reject the lot. This process is called Lot Acceptance Sampling or just Acceptance Sampling.

Attributes (i.e., defect counting) will be assumed

Acceptance sampling is "the middle of the road" approach between no inspection and 100% inspection. There
are two major classifications of acceptance plans: by attributes ("go, no-go") and by variables. The attribute case is
the most common for acceptance sampling, and will be assumed for the rest of this section.

Important point
A point to remember is that the main purpose of acceptance sampling is to decide whether or not the lot is
likely to be acceptable, not to estimate the quality of the lot.

Scenarios leading to acceptance sampling

Acceptance sampling is employed when one or several of the following hold:
 Testing is destructive
 The cost of 100% inspection is very high
 100% inspection takes too long

Acceptance Quality Control and Acceptance Sampling

It was pointed out by Harold Dodge in 1969 that Acceptance Quality Control is not the same as Acceptance
Sampling. The latter depends on specific sampling plans, which when implemented indicate the conditions for
acceptance or rejection of the immediate lot that is being inspected. The former may be implemented in the form of
an Acceptance Control Chart. The control limits for the Acceptance Control Chart are computed using the
specification limits and the standard deviation of what is being monitored (see Ryan, 2000 for details).
6. Write the formula for np-chart, c-chart, p formula, X-bar and sigma chart formulas?

The np-chart formula (for number of nonconforming units from subgroups with a constant size):

The u-chart formula (for number of nonconformities from subgroups that can vary in size):

The c-chart formula (for number of nonconformities, from subgroups of a constant size):

The p formula (for the proportion of nonconforming units from subgroups that can vary in size):

To calculate control limits for the p-chart:

X-bar and sigma chart formulas

X-bar control limits are based on either range or sigma, depending on which chart it is paired with. When the
X-bar chart is paired with a sigma chart, the most common (and recommended) method of computing control limits
based on 3 standard deviations is:

X-bar

n is the number of observations k is the number of subgroups

Upper control limit: Lower control limit:

Sigma

k is the number of subgroups

Upper control limit: Lower control limit:

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