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OUTLINE
Definition Brainstorming Exercise Nuts and Bolts How it Works Exercise Summary
Consumers Risk
Definition
Accepting a batch of materials that are of poor quality but assuming the materials are of high quality
Producers Risk
Definition
Rejecting a batch of materials that are of good quality
Brainstorming Exercise
How can you minimize consumer and producers risk in your organization?
Types of errors
Type I error Producers risk Type II error Consumers risk
How it Works
Acceptance sampling
used to determine whether to accept or reject product Can inspect 100% of products or few products
How it Works
Acceptance sampling
Batch assumed acceptable unless statistics strongly prove otherwise
- Ex: The most useful analogy is the U.S. Justice System, where suspects are assumed to be innocent unless they are proven guilty (Maleyeff 24).
How it Works
The following slide provides a visual representation of consumer and producers risk
How it Works
Table taken from Managing Quality An Integrative Approach
Product is Defective
Consumers risk
Outcome
Producers OK risk
Consumers risk
Firestone tires on Ford Explorers
Consumers thought were receiving high quality product but they did not
Producers risk
Automotive supplier rejects a batch of harnesses though the harnesses are of a high quality
Exercise
Exercise - Answer
A manufacturer of pens rejects a lot of high quality pens due to standards that fall outside of their allowable range
ANSWER-PRODUCERS RISK
Exercise
Exercise - Answer
A house is purchased that is believed to be of high quality, but within a month the plumbing has failed?
Summary
Bibliography
Foster, S. Thomas, Managing Quality An Integrative Approach, Prentice Hall, 2001, pgs. 265, 351-352. Graves, Samuel B,; Ringuest, Jeffrey L.; Producers and Consumers Risk When Proportion Defective is, Decision Sciences, Sept/Oct 1991, pgs. 753-771. Maleyeff, John, The fundamental concepts of statistical quality control, Industrial Engineering, Norcross, Dec 1994, pgs. 24-25.