Case Problem 1: Quality Associates, Inc

601 words - 3 pages

Quality Associates, Inc., a consulting firm, advises its clients about sampling and statistical procedures that can be used to control their manufacturing processes. IN one particular application, a client game quality associates a sample of 800 observations taken during a time in which that client's process was operating satisfactorily. The sample standard deviation for there data was .21 ; hence, with so much data, the population standard deviation was assumed to be .21. Quality associates then suggested that random samples of size 30 be taken periodically to monitor the process on an ongoing basis. BY analyzing the new samples, the client could quickly learn whether the process was operating satisfactorily. when the process was not ...view middle of the document...

Sample 1
Sample 2
Sample 3
Sample 4
11.55
11.62
11.91
12.02
11.62
11.69
11.36
12.02
11.52
11.59
11.75
12.05
11.75
11.82
11.95
12.18
11.90
11.97
12.14
12.11
11.64
11.71
11.72
12.07
11.80
11.87
11.61
12.05
12.03
12.10
11.85
11.64
11.94
12.01
12.16
12.39
11.92
11.99
11.91
11.65
12.13
12.20
12.12
12.11
12.09
12.16
11.61
11.90
11.93
12.00
12.21
12.22
12.21
12.28
11.56
11.88
12.32
12.39
11.95
12.03
11.93
12.00
12.01
12.35
11.85
11.92
12.06
12.09
11.76
11.83
11.76
11.77
12.16
12.23
11.82
12.20
11.77
11.84
12.12
11.79
12.00
12.07
11.60
12.30
12.04
12.11
11.95
12.27
11.98
12.05
11.96
12.29
12.30
12.37
12.22
12.47
12.18
12.25
11.75
12.03
11.97
12.04
11.96
12.17
12.17
12.24
11.95
11.94
11.85
11.92
11.89
11.97
12.30
12.37
11.99
12.23
12.15
12.22
11.93
12.25
Managerial Report:
1) Conduct a hypothesis test for each sample at the .01 level of significance and determine what action, if any, should be take. Provide the test statistic and p-value for each test.
2) Compute the standard deviation for each of the four samples. Does the assumption of .21 for the population standard deviation appear reasonable?
3) Compute limits for the sample mean X around μ=12 such that, as long as a new sample mean is within those limits, the process will be considered to be operating satifactorily. If X exceeds the upper limit or if X is below the lower limit, corrective action will be taken. These limits are refferred to as upper and lower control limits fro quality control purposes.
4) Discuss the implications of changing the level of significance to a larger value. What mistakes or error could increase if the level of significance in increased?

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