Acceptance Sampling

Acceptance Sampling By: Cori Rosoff Penn State University OISM 470W

Short Synopsis • Acceptance sampling Defined • When is acceptance sampling useful? • The risks associated with acceptance sampling

Short Synopsis • Disadvantages of acceptance sampling • Application of acceptance sampling • MoonLight Jeans example

Acceptance Sampling Defined • Acceptance Sampling is a form of inspection that is used to determine whether or not goods are coherent with a set standard of quality

Acceptance Sampling • How can this tool be used in your organization?

When is Acceptance Sampling useful? • When product testing is • destructive • expensive • time consuming • When developing new products

When is Acceptance Sampling useful? • When dealing with new suppliers • When a supplier’s product has had excellent quality in the past

Risks of Acceptance Sampling • Producers Risk • The risk associated with a producer rejecting a lot of materials that actually have good quality • Also referred to as a Type I Error

Risks of Acceptance Sampling • Consumers Risk • The risk associated with a consumer accepting a lot of materials that actually have poor quality • Also referred to as a Type II Error

Acceptance Sampling • Acceptance sampling is a process that helps to determine whether to accept or reject the sample being observed

Disadvantages of acceptance sampling • The process of the goods being inspected is not improved

When can acceptance sampling be applied? • At any point in production • The output of one stage is the input of the next

When can acceptance sampling be applied? • Sampling at the Input stage • Prevents goods that don’t meet standards from entering into the process • This saves rework time and money

When can acceptance sampling be applied? • Sampling at the Output stage • Can reduce the risk of bad quality being passed on from the process to a consumer • This can prevent the loss of prestige, customers, and money

When can acceptance sampling be applied? • Sampling at the Process stage • Can help adjust the process and reduce the amount of poor quality in production • Helps to determine the source of bad production and enables return for reprocessing before any further costs may be incurred

Typical Application of Acceptance Sampling • A vendor delivers a product to a manufacturing company • The product is a raw material used by the company

Typical Application of Acceptance Sampling • A sample of the shipment is taken • Quality characteristics of the units in the sample are inspected.

Typical Application of Acceptance Sampling • Based on the observations made, the decision is made to either accept or reject the entire shipment

Typical Application of Acceptance Sampling • The decision to accept or reject the shipment is based on the following set standards: • Lot size = N • Sample size = n • Acceptance number = c • Defective items = d • If d <= c, accept lot • If d > c, reject lot

Acceptance Sampling Plan • Mr. Smith owns and operates a manufacturing plant. • He receives a shipment of 1,000 sheets of glass. • Of the shipment, Mr. Smith chooses to sample 50 sheets.

Acceptance Sampling Plan • If more than 2 are defective, he is sending back the entire shipment to the supplier. • Mr. Smith observes 5 defective sheets of glass.

Acceptance Sampling Plan • Therefore, according to the set standards mentioned above: • N = 1,000 • n = 50 • c = 2 • d = 5

Acceptance Sampling Plan • What should Mr. Smith do in reference to the number of defective items observed????

Acceptance Sampling Plan • Remember, if d > c, reject lot • Since c = 2, and d = 5… • Mr. Smith should reject the lot of 1,000 sheets of glass

MoonLight Jeans • MoonLight Jeans store receives a shipment of 300 pairs of jeans from its warehouse. • It is common practice for the store to sample 5% of the total received. • The acceptance number under any and all circumstances for MoonLight Jeans is 10.

MoonLight Jeans • Of the 15 pairs of jeans observed, 2 were defective. • What conclusion should the store manager come to based on this information?

MoonLight Jeans • The store manager has just found out that the clerk who inspected the samples made a huge mistake… • The actual number of defective pairs of jeans sampled was 12.

MoonLight Jeans • What type of risk is involved with the error made at MoonLight Jeans? • How might this error affect the store and their customers?

Summary • Acceptance Sampling • a form of inspection that is used to determine whether or not goods are coherent with a set standard of quality • It does not improve the process that the products are derived from

Summary, cont… • Uses of Acceptance Sampling • Risks • Producers Risk • Consumers Risk

Summary, cont… • Stages of Inspection • Input Stage • Process Stage • Output Stage • Example Sampling Plan • MoonLight Jeans Example

Works Cited • Canavos, George C. and Don M. Miller. Custom Edition of Introduction to Business Statistics 2e. USA: Brooks/Cole Publishing Company, 2001. • Foster, S. Thomas. Managing Quality: An Integrative Approach. New Jersey: Prentice-Hall Inc., 2001. • Montgomery, Douglas C. Introduction to Statistical Quality Control. USA: John Wiley & Sons, Inc., 1996.

Works Cited, cont… • Starbird, S. Andrew. “The Effect of Acceptance Sampling and Risk Aversion on the Quality Delivered by Suppliers.” Journal of the Operational Research Society v45 (1994): 309-320. • Wetherill, Barrie G. Sampling Inspection and Quality Control. Great Britain: Butler & Tanner Ltd, 1969.

Acceptance Sampling