Operating Characteristic (OC) Curve

In a production system, all the final products may not fully meet the desired criteria, they can
contain defects. In order to evaluate our production lots or batches, we need to come up with a
plan. Acceptance sampling is a means to evaluate lots to see if they pass the standard .
Operating characteristic curve is a graphical look at our sampling plan. Operating characteristic
(OC) curve is a graph that is utilized to find out the probability of accepting production lots with
varying percentage of defectives. Probability of acceptance are plotted along the vertical axis
and percentage defectives along the horizontal axis. Advantages of this kind of graph are:

 It assists in the selection of sampling plans

 It helps in the selection of plans that are effective in reducing risks.

 It can help reduce keeping the high cost of inspection.

To interpret the OC curve, one needs to have a grasp of the following terms:

Lot Size (N): It is the total number of units in the lot that is subject to quality inspection.

Sample Size (n): It is the number of elements from the lot that will be randomly sampled and
examined. It should be less than the lot size.

Acceptance Number (c): It is the cutoff value for the largest number of
nonconforming/defective items from the sample of size n for which the lot should still be
accepted. The acceptance Number should be less than the sample size.

Acceptable Quality Level (AQL): It is the maximum acceptable percentage of defectives which
is defined by the producer.

Low Tolerance Percent Defect (LTPD): It is the percentage of defectives that defines customer’s
rejection point.

Producer’s risk (): It is the probability associated with rejecting a high-quality lot.
Customer’s risk (): It is the probability associated with accepting a low-quality lot.
An Operating Characteristic Curve for AQL = 0.02,  = 0.05, LTPD = 0.08, = 0.10 is shown
below:
Figure 1: Operating characteristic curve

From the curve it is seen that if the percentage of defective items is 5%, the probability of
acceptance is around 45%. Any percentage defective to the left of 2 percent would always be
accepted.
 If the
sample
size or

acceptance number changes, the shape of OC curve also changes. As the sample size goes up,
the curve becomes steeper. Lower acceptance number makes the plan tighter. These are
shown in the following graphs:

Figure 2: OC curve with different sample sizes with Figure 3: OC curve with different acceptance numbers for a sample
acceptance numbers in proportion to sample size size n=50

OC curves are compared to help choose the appropriate sampling plan.

For example, if the sample size is 55 (in Figure 4) and the percentage of defect is 10%, the
probability of acceptance is around 0.15. But if the sample size is 35 with same percentage of
defect, the probability of acceptance becomes 0.306. Thus by varying the sample size, one can
calculate the risks and define the acceptable and unacceptable quality levels for the purpose of
acceptance sampling.

References:
1. https://www.businessmanagementideas.com/production-management/operating-
characteristic-o-c-curves/6960?fbclid=IwAR3YJxiggKBishfgao-
BsaIYDMjgvRQgcmGmTKohfhMYhxAO-VH9f0isgEQ
2. https://support.minitab.com/en-us/minitab/18/help-and-how-to/quality-and-process-
improvement/acceptance-sampling/supporting-topics/operating-characteristic-oc-curve/
3. https://study.com/academy/lesson/operating-characteristic-oc-curve-definition-uses.html
4. Operations and Supply Chain Management F. Robert Jacobs, Richard B. Chase, 15th Edition,
Chapter 13