LESSON 1

QUALITY

Quality
 Meeting the customer requirements

Reliability
 It is the ability of product and service to continue to meet the customer requirements

 Quality is meeting the customer requirements, and this is not restricted to the functional characteristics of
the product or services.
 Quality is also defined as excellence in the product or service that fulfills or exceeds the expectations of the
customer.
 There are 9 dimensions of quality that may be found in products that produce customer satisfaction.
 Through quality is an abstract perception, it has a quantitative measure Q= (P / E), where Q=quality,
P=performance (as measured by the Mfgr.), and E=expectations of the customer.
 Quality is not fine tuning your product at the final stage of manufacturing, before packaging and shipping.
 Quality is in built into the product at every stage from conceiving specification and design stages to
prototyping testing and manufacturing stages.

FEIGENBAUM (1983) DEFINED QUALITY AS FOLLOWS

 Quality is total composite product (goods and services) characteristics, through which the product in
use will meet the needs and expectations of the customers.
 Concept of quality must start with identification of customer quality requirements and must end only
when the finished product is placed into the hands of the customer who remains satisfied through
various stages of relationship with the seller

American Society of Quality Control (ASQC) and American National Standard Institute (ANSI) defined
 Quality is totality of features and characteristics of product (goods and services) that bears on its ability
to satisfy given needs

ISO 9000:2000
 Quality is the degree to which a set of inherent characteristics fulfills requirements

Quantified
 Q=P/E P-Performance, E-Expectations

Joseph M. Juran
 Quality is fitness for use or purpose

Philips B. Crosby
 Quality is conformance to requirements
W. Edwards Deming
 A predictable degree of uniformity and dependability at low cost and suited to market

Bill Conway
 Development, manufacture, administration and distribution of consistently low cost and products and
services that customers need and want

Approaches to define Quality

Transcendent Approach
 Quality is absolute and universally recognizable.
 It is common notion used by laymen
 There is no subjective judgement and is estimated by looking at the product

Product Based Approach

 Attributes of a particular product in a specific category
 These attributes are accepted as bench of quality by the industry
 Others in the same industry try to produce close to this quality

User Based Approach

 Defined as “Fitness for use”
 Viewed from user's perspective and is dependent on how well do the product meet needs of the
consumer.
 Also known as Customer Oriented Approach

Production Based Approach

 An outcome of engineering or operational excellence and is measured in terms of quality of
conformance
 The producer has specifications and produces the product as per the specifications

Value Based Approach

 Quality is viewed in context of price
 Quality is satisfactory, if it provides desired performance at an acceptable price
 Customer looks at the total value proposition and not the price alone
 Value=Benefits/Price

 Manufacturing Dimensions (Product)

 Performance
 Features
 Reliability
 Conformance
 Durability
  Serviceability
 Aesthetics
 Perceived quality

 Service Dimensions
 Convenience
 Reliability
 Responsiveness
 Time
 Assurance
 Courtesy
 Tangibles

Attributes/Dimensions of Quality
 Performance. Main characteristics of the product/service
 Aesthetics. Appearance, feel, smell, taste
 Special Features. Extra characteristics
 Conformance. How well product/service conforms to customer’s expectations
 Reliability. Consistency of performance
 Durability. Useful life of the product/service
 Perceived Quality. Indirect evaluation of quality (e.g. reputation)
 Serviceability. Service after sale

Challenges with Service Quality

 Customer expectations often change
 Different customers have different expectations
 Each customer contact is a “moment of truth”
 Customer participation can affect perception of quality
 Fail-safing must be designed into the System

Examples of Quality Dimensions

The Acceptance Inspection Model

Quality Control (QC)

 “the operational techniques and activities that are used to fulfil requirements for quality”.
 The purpose of quality control is to uncover defects and have them corrected so that defect-free
products will be produced.
 Quality control is limited to looking at products
 Quality control is testing the final product against product quality standards.
 Quality control is operational techniques that are used to fulfill requirements for product quality.
 It is the part of Quality Management focused on fulfilling requirements of the customers for the quality
control
Quality Assurance (QA)
 “all planned and systemic activities necessary to provide adequate confidence that a product or service
will satisfy given requirements for quality”.
 Quality assurance is oriented toward preventing detects.
 It is defined by those activities that modify the development processes to prevent the introduction of
defects.
 Quality assurance is more concerned with the processes that produce the final product, and making
sure that quality is part of each phase.
 QA is about maturing the process towards minimum defect.
 It is about balancing methodology, leadership, and technology.
 It is about taking into account human factors as well as technological onces.

Evolution of Quality Management

Company wide Quality Control
 Measured in all functions connected with production such as
o R&D
o Design
o Engineering
o Purchasing,
o Operations etc

Total Quality Management

 Measured in all aspects of business,
 Top management commitment
 Continuous improvement
 Involvement & participation of employees
Mass Inspection
 Inspecting
 Salvaging
 Sorting
 Grading
 Rectifying
 Rejecting

Quality Control
 Quality manuals
 Product testing using SQC
 Basic quality planning

Quality Assurance
 Emphasis on prevention
 Proactive approach using SPC
 Advance quality planning

Total Quality Management

 All aspects of quality of inputs
 Testing equipments
 Control on processes

TQM Evolution

Evolution of Quality
Management

Inspection – QC – QA – TQM

TQM
 Total – made up of the whole
 Quality – degree of excellence a product or service provides
 Management – art of planning, organizing, controlling etc.
Therefore, TQM is the art of
managing the whole to
achieve excellence

Meaning of TQM

System
 All persons
  Of all divisions
 At every stratum

Method
 MBO, Kaizen, QC Circle, 5S, TPM
 SQC, SPC, FMEA, MSA, OFE

Purpose
 Quality improvement
 Cost reduction
 Delivery execution
 Safety maintenance
 Morale boosting
 Environmental
Definition of TQM

 Systematic activities of operating the whole units of a company effectively and efficiently to supply
goods and services of quality satisfactory to customers at right time and at right price, thus
contributing to attaining Business Purposes.
 TQM is integrated organizational approach in delighting customers (both internal and external) by
meeting their expectations on a continuous basis through everyone involved in the organization,
working on continuous improvement in all products, services, and processes along with proper
problem solving methodology.
 TQM is a management approach for an organization, centered on quality, based on the participation of
all its members and aiming at long-term success through customer satisfaction, and benefits to all
members of the organization and to society.
 Total Quality Management (TQM) is a management strategy aimed at embedding awareness of quality
in all organizational processes.
 Total Quality Management means that the organization's culture is defined by and supports the
constant attainment of customer satisfaction through an integrated system of tools, techniques, and
training. This involves the continuous improvement of organizational processes, resulting in high
quality products and services.

Goal of TQM
 “Do the right things right the first time, every time.”

Pillars of TQM
1. Customer Focus: Studying customer needs, gathering customer requirements, and measuring and
managing customer satisfaction.
Customer satisfaction is seen as the company's highest priority. The company believes that it will only be
successful if its customers are satisfied.
2. Process Management: Develop a production process that reduce the product variations. Applying the
same process; the same product should be produces with the same level of quality every time.
Teams are process-oriented, and interact with their internal customers to deliver the required results.
Management's focus is on controlling the overall process, and rewarding teamwork.

3. Employee Empowerment (Human side of Quality): TQM environment requires a committed and well-
trained work force that participates fully in quality improvement activities.
On-going education and training of all employees supports the drive for quality.

4. Continuous Improvement: TQM recognizes that product quality is the result of process quality. As a result,
there is a focus on continuous improvement of the company's processes.
This will lead to an improvement in process quality. In turn this will lead to an improvement in product quality.
Measurement and analysis id the tool that has been used for that.

Reduce rework activities (Cost reduction)

Shorter development cycle (Cost reduction)
Increased customer satisfaction (Quality improvement)

TQM six basic Concepts

1. Management commitment to TQM principles and methods & long term Quality plans for the Organization
2. Focus on customers – internal & external
3. Quality at all levels of the work force.
4. Continuous improvement of the production/business process.
5. Treating suppliers as partners
6. Establish performance measures for the processes.

Another way to put it

At it’s simplest, TQM is all managers leading and facilitating all contributors in everyone’s two main objectives:
 total client satisfaction through quality products and services; and
 continuous improvements to processes, systems, people, suppliers, partners, products, and services.

Continuous Improvement versus Traditional Approach

 Traditional Approach Continuous Improvement
Market share focus Customer focus
Individuals Cross functional teams
Focus on who and why Focus on what and how
Short term focus Long term focus
Status quo focus Continuous improvement
Product focus Process improvement focus
Innovation Incremental improvements
Fire fighting Problem solving

Understanding and building the quality chains

 “A Customer’s impression of quality begins with the initial contact with the company and continues
through the life of the product.”
o Customers look to the total package - sales, service during the sale, packaging, deliver, and service
after the sale.
o Quality extends to how the receptionist answers the phone, how managers treat subordinates,
how courteous sales and repair people are, and how the product is serviced after the sale.
 “All departments of the company must strive to improve the quality of their operations.”
 To achieve quality throughout an organization, each person in the quality chain must interrogate every
interface as follows:
o Customers:
 who are my immediate customers?
 what are their true requirements?
 how can I measure my ability to meet the requirements?
o Suppliers:
 who are my immediate suppliers?
 what are my true requirements?
 The concept of internal and external customers/suppliers forms the core of total quality.
 Quality has to be managed – it will not just happen.
 Failure to meet the requirements in any part of quality chain leads to yet more failure.
 The price of quality is the continual examination of the requirements and our ability to meet them🡺
“continuing improvement” philosophy.

Customer types

 External and Internal customers

 External – current, prospective and lost customers
 Internal – Every person in a process is a customer of the previous operation.( applies to design,
manufacturing, sales, supplies etc.) [Each worker should see that the quality meets expectations of the
next person in the supplier-to-customer chain]
 TQM is commitment to customer-focus - internal and external customers.
Internal customer/Supplier relationships

Questions asked by people to their internal customers

 What do you need from me?
 What do you do with my output?
 Are there any gaps between what you need and what you get?
Good team-work and inter-Departmental harmony is required. Also the leaders role in supervising the internal
customer-supplier chain.
Internal/External Customers

Understanding and building the quality chains

Meeting the requirements
 the first item on the list of things to do is find out what requirements are.
 If we are dealing with a customer/supplier relationship, the supplier must understand not only the
needs of the customer but also the ability of his own organization to meet them.
 Internal supplier/customer relationships are often the most difficult to manage in terms of establishing
the requirements.

Customer satisfaction
 Customer is the Boss or ’King’
 Customer dictates the market trends and direction
 Customer not only has needs to be supplied( basic performance functions)
 Also he ‘wants what he wants!’( additional features satisfy him and influence his purchase decision)
 Hence the Suppliers and Manufacturers have to closely follow at the heel of the customer.

Customer Satisfaction Organizational Diagram

Integrated Quality

To understand how quality may be built into a product or service, at any stage, it is necessary to examine the
three distinct, but interrelated aspects/parameters of quality:
1. Quality of Design
Is the extent to which the design reflects a products or service that satisfies the customer need or
expectations.
 Quality of design is a measure of how well the product or service is designed to achieve the
agreed requirements.
 The most important feature of the design, with regard to achieving quality, is the specification.
 Specifications must also exist at the internal supplier/customer interfaces.
 There must be an agreement that the operating departments can achieve that requirement.

2. Quality of Conformance to design

Is the extent to which the product or service conforms to the design standard
 What the customer actually receives should conform to the design.
  The conformance check makes sure that things go according to plan.
 Organizations may use the simple matrix to assess how much time spent doing the right things
right.

3. Quality of Use
Is the extent to which a product is easy to use, reliable and maintainable.

How work gets done in an organization?

 Inputs. Delivered by suppliers
 Processes. Steps to transform inputs
 Output customers. Goods and Services valued

Quality of outputs depends on the correct execution of FIRST two steps. A mistake anywhere in the process
affects everyone in one way to another.

Managing processes

Have we done the job correctly?

 This is not quality control, it is detection.
 This process –detection- happens at the end of the processes.

Are we capable of doing the job correctly?

 We should realize that an answer will only be obtained by means of satisfactory methods, materials,
equipment, skills and instruction, and a satisfactory ‘process’.

What is a process?
 A process is the transformation of a set of inputs, which can include actions, methods and operations,
into outputs that satisfy customer needs and expectations, in the form of products, information,
services or –generally- results.
 To produce an output that meets the requirements, it is necessary to define, monitor and control the
inputs to the process.
 Every single task throughout an organization must be viewed as a process.
If our process is capable of meeting the requirements, “Do we continue to do the job correctly?”, this needs to
monitor and control the process.

Quality control
 The activities and techniques employed to achieve and maintain the quality of a product, process, or
service.
 A set of activities designed to evaluate a developed work product.
 It is concerned with finding and eliminating causes of quality problem.
o Finding defects in specific deliverables.
o It is product – oriented.
o Focuses on employed activities and techniques.
o Examples (testing, monitoring, ....)

Quality assurance
 The prevention of quality problems through planned and systematic activities (including
documentation).
 A set of activities designed to ensure that the development and/or maintenance process is adequate to
ensure a system will meet its objectives.
o Ensure that the process is defined and appropriate.
o Process-oriented.
o Aims at preventing quality problems.
o Examples (development of methodology & standards, establishment of QMS, .....)

Quality starts with ‘Marketing’

 Marketing is responsible for determining the key characteristics that determine the suitability of the
product or service in the eyes of the customer.
  Excellent communication between customers and suppliers is the key to total quality.
 Requirements must be communicated properly throughout the organization in the form of
specifications which can be used as the basis for the design .
 The information requirements include:
o Characteristics of performance & reliability
o Aesthetic characteristics
o Any obligatory regulations or standards governing the nature of the product or service
 Marketing must also establish systems for feedback of customer information and reaction, and these
systems should be designed on a continuous monitoring.
 In reviewing of market readiness of a new product or service. Items that require some attention
include assessment of:
o The suitability of the distribution & customer-service system
o training of personnel in the field
o Availability of spare parts or staff support
o Evidence that the organization is capable of meeting customer requirements

Customer satisfaction/dissatisfaction feedback

 Customer feedback has to be continuously sought and monitored - not one-time only!(
 Pro-active! Complaints are a reactive method of finding out there is a problem)
 Customer feedback can be relayed to Mfgr.
 Performance comparison with competitors can be known
 Customers needs can be identified
 Areas for improvement can be noted.
Customer feedback methods

 Comment cards enclosed with warranty card when product is purchased.

 Customer survey and questionnaire
 Customer visits
 Customer focus groups
 Quarterly reports
 Toll-free phones
 e-mail, Internet news groups, discussion forums
 Employee feedback
 Mass customization.

Customers- Handle with care!

 Employers don’t pay wages but it is the customer who pays the wages!
 So take good care of your customers.
 Customer-care centers not just profit-centers!
 The entire organization must in effect revolve around the customer – whether the customer is being
well served and if he is really pleased, contented and satisfied with the service you have to offer.

Quality in all functions

 For an organization to be truly effective, each part of it must work properly together.
 Errors have a way of multiplying.
  Business employs so many different specialist skills that everyone has to rely on the activities of others
in doing their jobs.
 The commitment of all members of an organization is a requirement of ‘company-wide quality
improvement’.

Effects of poor Quality

1. Low customer satisfaction
2. Low productivity, sales & profit
3. Low morale of workforce
4. More re-work, material & labor costs
5. High inspection costs
6. Delay in shipping
7. High repair costs
8. Higher inventory costs
9. Greater waste of material

Benefits of Quality
1. Higher customer satisfaction
2. Reliable products/services
3. Better efficiency of operations
4. More productivity & profit
5. Better morale of work force
6. Less wastage costs
7. Less Inspection costs
8. Improved process
9. More market share
10. Spread of happiness & prosperity
11. Better quality of life for all.

LESSON 2
7 QC TOOLS

What are 7 QC Tools?

 QC tools are the means for collecting data , analyzing data , identifying root causes and measuring the
results.
 THESE TOOLS ARE RELATED TO Numerical DATA processing

7 QC Tools
•Pareto Diagram
•Stratification
•Scatter Diagram
•Cause and Effect Diagram
•Histogram
•Check Sheet
•Control Chart/Graph

Application of QC tools in Problem Solving

1. What is Pareto diagram?
 A Pareto diagram is a combination of bar and line graphs of accumulated data, where data associated
with a problem (e.g., a defect found, mechanical failure, or a complaint from a customer) are divided
into smaller groups by cause or by phenomenon and sorted, for example, by the number of
occurrences or the amount of money involved. (The name “Pareto” came from an Italian
mathematician who created the diagram.)

2. When is it used and what results will be obtained?

 It is mainly used to prioritize matters, and because of its easiness of use, the diagram is used in a wide
variety of fields.

1. What is Scatter Diagram?

 A scatter diagram is used to “examine the relationship between the two, paired, interrelated data
types, ” such as “height and weight of a person.” A scatter diagram provides a means to find whether
 or not these two data types are interrelated. It is also utilized to determine how closely they are
related to identify a problem point that should be controlled or improved.

2. When is it used and what results will be obtained?

 The table on next slide shows some examples of scatter diagram’s usage. If, for example, there is a
relationship where “an increase in the number of rotations (x) causes an increase in abrasion (y),”
there exists “positive correlation.” If, on the other hand, the existence of a relationship where “an
increase in the number of rotations (x) causes a decline in abrasion (y)” indicates that there is
“negative correlation.”

Scatter Diagram

1. What is Stratification ?
 Stratification means to “divide the whole into smaller portions according to certain criteria.” In case of
quality control, stratification generally means to divide data into several groups according to common
factors or tendencies (e.g., type of defect and cause of defect).
 Dividing into groups “fosters understanding of a situation.” This represents the basic principle of
quality control.

2. When is it used and what results will be obtained?

 The “common and basic principle” of quality control is stratification, i.e., to think a matter out by
breaking it into smaller portions. Stratification has a number of useful purposes. The table below
shows only a few examples of these purposes.

Stratification
1. What is Cause & effect Diagram ?
 A cause and effect diagram is “a fish-bone diagram that presents a systematic representation of the
relationship between the effect (result) and affecting factors (causes).”
 Solving a problem in a scientific manner requires clarification of a cause and effect relationship, where
the effect (e.g., the result of work) varies according to factors (e.g., facilities and machines used,
method of work, workers, and materials and parts used). To obtain a good work result, we must
identify the effects of various factors and develop measures to improve the result accordingly.

2. When is it used and what results will be obtained?

 A cause and effect diagram is mainly used to study the cause of a certain matter. As mentioned above,
the use of a cause and effect diagram allows clarification of causal relation for efficient problem
solving. It is also effective in assessing measures developed and can be applied to other fields
according to your needs.
1. What is Histogram?
 When creating a histogram, “a range of data is divided into smaller sections having a uniform span,and
the number of data contained in each section (the number of occurrences) is counted to develop a
frequency distribution table.” Then, “a graph is formed from this table by using vertical bars, each
having the height proportional to the number of occurrences in each section.”

2. When is it used and what results will be obtained?

 A histogram is mainly used to analyze a process by examining the location of the mean value in the
graph or degree of variations, to find a problem point that needs to be improved. Its other applications
are listed in the table below.

1. What is Check sheet ?

 A check sheet is “a sheet designed in advance to allow easy collection and aggregation of data.” By just
entering check marks on a check sheet, data can be collected to extract necessary information, or a
thorough inspection can be performed in an efficient manner, eliminating a possibility of skipping any
of the required inspection items.
 A check sheet is also effective in performing stratification (categorization).
 Used to identify defects
2. When is it used and what results will be obtained?
  Please refer to the table on next slide for the usage and benefits of a check sheet. It is frequently used
in daily business operations, often not specifically for QC purposes.

1. What is Control Chart ?

 A control chart is used to examine a process to see if it is stable or to maintain the stability of a
process.
 This method is often used to analyze a process. To do so, a chart is created from data collected for a
certain period of time, and dots plotted on the chart are examined to see how they are distributed or
if they are within the established control limit. After some actions are taken to control and
standardize various factors, this method is also used to examine if a process is stabilized by these
actions, and if so, to keep the process in a stable state.

2. When is it used and what results will be obtained?

 There are two types of control charts: one used for managerial purposes and the other for analytical
purposes. A control chart is used to identify dots that are outside the control limit, which indicate
some anomalies in a process. In addition, seven consecutive dots showing values that are below or
above the mean (central) value, or an increment or a decline represented by seven consecutive dots
also indicate “a problem in a process.”
 We need to examine what has caused such a tendency or an increment/decline.

1. What is Graph ?
  A graph is “a graphical representation of data, which allows a person to understand the meaning of
these data at a glance.” Unprocessed data simply represent a list of numbers, and finding certain
tendencies or magnitude of situation from these numbers is difficult, sometimes resulting in an
interpretational error. A graph is a effective means to monitor or judge the situation, allowing quick
andprecise understanding of current or actual situation. the
 A graph is a visual and summarized representation of data that need to be quickly and precisely
conveyed to others.

2. When is it used and what results will be obtained?

 A graph, although it is listed as one of the QC tools, is commonly used in our daily life and is the most
familiar means of assessing a situation.

To sumup 7 QC tools (Numerical data ) are used as follow:

Pareto Diagram. To identify the current status and issues

Stratification. Basic processing performed when collecting data
Scatter Diagram. To identify the relationship between two things
Cause and Effect Diagram. To identify the cause and effect relationship
Histogram. To see the distribution of data
Check Sheet. To record data collection
Control Chart/Graph. To find out abnormalities and identify the current status

LESSON 3
PARETO ANALYSIS
History
• Named after Vilfredo Pareto -an Italian economist
• He observed in 1906 that 20% of the Italian population owned 80% of Italy's wealth.

What is it?
• One of the 7 tools of Quality Management
• Statistical technique in decision making for selection of limited tasks which have significant overall
impact

Pareto Principle
  Also referred to as the 80-20 rule.
 States that 80% percent of the problems or effects come from 20% of the causes.
 Focuses on identifying the ‘vital few’ from the ‘trivial many’.
 The exact percentages may vary in each situation.
 However, most of the activity is caused by relatively few of its factors.
 Used when we have many problems or projects and we want to focus on the most significant ones.
 Helps prioritize the improvement opportunities that bring the most value to business
 Allows to reach a consensus about needs to be address first
 Used during improvement projects to focus on the cause that contributes most to a particular effect

Pareto Chart
• A Pareto Chart is a series of bars whose heights reflect the frequency or impact of problems.
• The bars are arranged in descending order of height from left to right from most frequent activities to
lesser.
• Bars on left are relatively more important than the bars on the right.
• The horizontal axis represents the types of activities such as issues, problems or causes. The vertical
axis represents the frequencies of those activities.
• By arranging the bars from largest to smallest, the vital few activities can be easily addressed to have
greater attention.
• If there are a lot of small or infrequent factors, consider adding them together into an “other”
category.
• A cumulative line above the bars shows the cumulative percentages that can be read from the right
vertical axis.
• If the resulted Pareto chart clearly illustrates a Pareto pattern, this suggests that only few causes
account for about 80% of the problem.
• This means that there is a Pareto effect.
• If no Pareto pattern is found, we cannot say that some factors are more important than others.

How to Construct a Pareto Chart:

 Define the problem.
 Identify the possible causes of the problem (using brainstorming or similar technique).
 Collect then record the data.
 Calculate the frequencies of the identified causes.
 Draw a vertical bar for each cause or cause group.
 Sort them by frequency in descending order.
 Calculate then draw the cumulative percentage line.
  If you observe a Pareto effect, focus your improvement efforts on those few factors.

How is pareto chart constructed

For example, if a business was investigating the delay associated with processing credit card applications, the
data could be grouped into the following categories: no signature, residential address not valid, non-legible
handwriting, already a customer, and other.

Step 1: Record the raw data

Analysis sheet
Category Frequency
No address 9
Non-legible 22
writing
Current Customer 15
No Signature 40
Other 8

Step 2: Order the data

Category Frequency
No Signature 40
Non-legible writing 22

Current Customer 15
No address 9
Other 8

Step 3: Determine the percentage that each category represents

Category Frequency Percentage
No Signature 40 43%
Non-legible 22 23%
writing
Current Customer 15 16%
No address 9 10%
Other 8 8%

Step 4: Determine the percentage that each category represents.

Category Frequency Percentage Cumulative
Percentage
No Signature 40 43% 43%
Non-legible writing 22 23% 66%
Current Customer 15 16% 82%
No address 9 10% 92%
Other 8 8% 100%

Step 5: Prepare & Analyze the diagram

The Pareto Principle in Work Life (20 percent effort, 80 percent results)
• Problem Solving
• To-Do List of the day
• Passion
• Relationship
• Organizing

Problem Solving
• Pareto Analysis can really help in identifying the most critical problem to solve as well as the level of
criticality.
• Identify and list problems and their causes.

To do list of the day

• Estimate a value % in terms of goal achievement or satisfaction against each of your tasks for the day –
email, customer calls, reports, specific tasks.
• What 20% of the tasks listed contribute to 80% of the goals you seek to achieve?
• Concentrate on these tasks first in your most productive period of the day.

Passion
• certain “activities” account for the greatest amount of happiness and satisfaction. These activities are
the ones that we feel most passionately about.
• Once you have identified your passions, be very careful of the time spent on those 80% activities that
produce little satisfaction for you.
• No one really benefits if you are not happy or passionate about what you are doing.
• Apply Pareto to not only find your passions but also pursue them by comparing the results against the
efforts you need to put in.

Relationships
• 20% of the people you know give you 80% of your joy and support.
• Observe your friends, office colleagues and social circle.
• Compare that to the amount of stress or joy you are getting in return.

Cut the clutter

 • Most people only use 20% of what they own on a regular basis.
• A good part of the other 80% is things we used in the past or we think we may use in the future.
• This basically means that about 80% of our possessions just sit around every day, doing nothing more
than gathering dust or occupying space.
• Take a look at your desk, cupboard, files on your computer – if you have not used something in the
past year, it is highly unlikely you will ever use it. Lighten your load – throw, delete, donate that 80%.

Conclusion
• Breaks a big problem down into smaller pieces
• Identifies the most significant factors
• Shows where to focus efforts & allows better use of limited resources.
• Helps to separate the few major problems from the many possible problems.

LESSON 4
SCATTER DIAGRAM

A scatter diagram shows relationships between two sets of data.

Scatter Plots

Correlation describes the type of relationship between two data sets. The line of best fit is the line that comes
closest to all the points on a scatter plot. One way to estimate the line of best fit is to lay a ruler’s edge over
the graph and adjust it until it looks closest to all the points.

Positive correlation; both data sets increase together (linear).

No correlation; there is no relationship between the data (nonlinear).
Negative correlation; as one data set increases, the other decreases (linear).

Example 1: Making a Scatter Plot of a Data Set

Use the given data to make a scatter plot of the weight and height of each member of a basketball team.

The points on the scatter plot are (71, 170), (68, 160), (70,
175), (73, 180), and (74, 190).

Example 2: Making a Scatter Plot of a Data Set

Use the given data to make a scatter plot of the weight and height of each member of a soccer team.
The points on the scatter plot are (63, 125), (67, 156), (69, 175), (68, 135), and (62, 120).

Example 3: Making a Scatter Plot of a Data Set

Use the data to predict how many circuit boards a worker will assemble in 10 hours.

According to the graph, a worker will assemble approximately 10 circuit boards in 10 hours.

LESSON 5
FREQUENCY DISTRIBUTIONS AND GRAPHS

A frequency distribution is the organization of raw data in table from, using classes and frequency.
It is the tabular arrangement of the gathered data by categories plus their corresponding frequencies and class
marks or midpoints.

Definition of Terms

1. Range (R) – the difference between the highest score and the lowest score.
2. Class Interval (i) – a grouping or category defined by a lower limit and an upper limit.
3. Class Boundaries (CB) – these are also known as the exact limits, and can be obtained by subtracting 0.5
from the lower limit of an interval and adding 0.5 to the upper limit interval.
4. Midpoint (x) – is the middle value or class mark of a class interval. It is obtained by getting the average of
the lower class limit and the upper class limit.
5. Class Size (i) – is the difference between the upper class boundary and the lower class boundary of a class
interval
6. Relative Frequency (RF) – these are the percentage distribution in every class interval.
7. Class Frequency – it refers to the number of observations belonging to a class interval, or the number of
items within a category.

Example 1
Statistics Test Scores of 50 students. Construct a frequency distribution
Steps in Constructing a Frequency Distribution

1. Find the range R, using the formula:

R = Highest Score – Lowest Score
R = 90 – 51
R = 39

2. Compute for the number of class intervals, n, by using the formula: i = R/(1+3.322 log n)
i = R/(1+3.322 log n)
i = 39/(1+3.322 log 50)
i = 5.87 or 6
Note: The ideal number of class intervals should be 5 to 15.

3. Compute for the class size, h, using the formula:

h = R/i
h = 39/6
h = 6.5
Class size must rounded off to the nearest whole number. Therefore, h = 7
Cell Midpoint (x) = LB + i/2
= 50.5 + 6/2
x = 53.5

4. Using the lowest score as lower limit, add (h – 1)to it to obtain the higher limit of the desired class interval.

5. The lower limit of the second interval may be obtained by adding the class size to the lower limit of the first
interval. Add (h – 1) to the result to obtain the higher limit of the second interval.

6. Repeat step 5 to obtain the third class interval, and so on, and so forth.

7. When the n class intervals are completed, determine the frequency for each class interval by counting the
elements.

Example 2
The number of miles that the employees of a large department store traveled to work each day
Relative frequency
o Relative frequency of a class is the frequency of that class divided by to total number of frequency.

Histogram
A histogram is a graph that displays the data by using contiguous vertical bars (unless the frequency of a class
is 0) of various heights to represent the frequencies of the classes.

Example
Construct a histogram to represent the data shown below for the record high temperature:
The Ogive is a graph that represents the cumulative frequencies for the classes in a frequency distribution.
 LESSON 6
MEASURES OF CENTRAL TENDENCY

Measures of central tendency are numerical descriptive measures which indicate or locate the center of a
distribution or data set.

In layman’s term, a measure of central tendency is an AVERAGE. It is a single number of value which can be
considered typical in a set of data as a whole.

The Mean of a set of values or measurements is the sum of all the measurements divided by the number of
measurements in the set.
 Among the three measures of central tendency, the mean is the most popular and widely used. It is
sometimes called the arithmetic mean.
 If we compute trhe mean of the population, we call it the parametric or population mean, denoted by
u (read “mu”).
 If we get the mean of the sample, we call it the sample mean and it is denoted by x (read “x bar”).

Mean for Ungrouped Data

Weighted Mean

Weighted mean is the mean of a set of values wherein each value or measurement has a different weight or
degree of importance. The following is its formula.
Properties of Mean

1. Mean can be calculated for any set of numerical data, so it always exists.
2. A set of numerical data has one and only mean.
3. Mean is the most reliable measure of central tendency since it takes into account every item in the set
of data.
4. It is greatly affected by extreme or deviant values (outliers)
5. It is used only if the data are interval or ratio.

The Median, denoted Md, is the middle value of the sample when the data are ranked in order according to
size.
Median for Odd sample:
The median is the middle number when the data are arranged in order.

Median for Even sample:

When there are even samples, the median is the mean of the two middle numbers.

Properties of Median

1. Median is the score or class in the distribution wherein 50% of the score fall below it and another 50%
lie.
2. Median is not affected by extreme or deviant values.
3. Median is appropriate to use when there are extreme or deviant values.
4. Median is used when the data are ordinal.
5. Median exists in both quantitative and qualitative data.

The Mode, denoted Mo, is the value which occurs most frequently in a set of measurements or values. In
other words, it is the most popular value in a given set.
Properties of Mode

1. It is used when you want to find the value which occurs most often.
2. It is a quick approximation of the average.
3. It is an inspection average
4. It is the most unreliable among the three measures of central tendency because its value is undefined
in some observations.

Measure of Central Tendency (Grouped Data)

 Are the data or scores that are arranged in a frequency distribution.

 One formula in solving the mean for grouped data is called midpoint.
Median of Grouped Data
In computing for the median of grouped data, the following formula is used;
Mode od Grouped Date
The mode of grouped dat can be approximated using the following formula:
 LESSON 7
MEASURE OF VARIABILITY OF DISPERSION

Measures of Variability/Dispersion
The “spread” in a set of measurement.
It refers to how spread out a group of data is and it measures how much your scores differ from each other.

Measures of Variation:
1. Range
2. Quartile deviation
3. Mean deviation
4. Variance
5. Standard deviation
6. Coefficient variation

Range, refers to the difference between the highest and the lowest observation

Merits and Demerits of Range

Merits
1. It is simple to understand
2. It is easy to calculate
3. In certain types of problems like quality control, weather forecasts, share price analysis, etc. range is
most widely used

Demerits
1. It is very much affected by the extreme items
2. It is based on only two extreme observations
3. It cannot be calculated from open end class intervals
4. It is not suitable for mathematical treatment
 5. It is a very rarely used measure

Mean deviation for Ungrouped

The average of the summation of the absolute of each observation/score from the mean
Merits and demerits of Mean deviation

Merits
1. It is simple to understand and easy to compute
2. It is rigidly defined
3. It is based on all items of the series
4. It is not much affected by the fluctuations of sampling
5. It is less affected by the extreme items
6. It is flexible, because it can be calculated from any average
7. It is better measure of comparison

Demerits
1. It is not a very accurate measure of dispersion.
2. It is not suitable for further mathematical calculation
3. It is rarely used. It is not as popular as standard deviation
4. Algebraic positive and negative signs are ignored. It is mathematically unsound and illogical.

Standard deviation for ungrouped data

It is defined as the positive square root of the arithmetic mean of the square of the deviations of the given
observations from their arithmetic mean
Merits and demerits of standard deviation

Merits
1. It is rigidly defined and its value is always definite and based on all observations and the actual signs of
deviations are used
2. As it is based on arithmetic mean, it has all the merits of arithmetic mean
3. It is the most important and widely used measure of dispersion
4. It is possible for further algebraic treatment
5. It is less affected by the fluctuations of sampling and hence stable
6. It is the basis for measuring the coefficient of correlation and sampling

Demerits
1. It is not easy to understand and it is difficult to calculate
2. It gives more weight to extreme values because the values are squared up.
3. As it is an absolute measure of variability, it cannot be used for the purpose of comparison.
Variance for ungrouped data

Variance is the mean or average of the squares of the deviation of each measurement from the mean

Grouped data

Range, refers to the difference between the upper boundary of the highest class interval and lower boundary
of the lowest class interval
Mean deviation for grouped

The average of the summation of the absolute deviation of each observation/score from the mean