Chapter 5 & 6 Case Study
ISQS 5345: Business Statistics
Team 4:
Kyle Lock
Amanda Mock
Jeff Morris
Derrick Plunk
Brian Wilder
9/22/2009
Table of Contents
Chapter 5 Case Study .................................................................................................................................... 3
Question 1 ................................................................................................................................................. 3
Question 2 ................................................................................................................................................. 3
Question 3 ................................................................................................................................................. 3
Chapter 6 Case Study .................................................................................................................................... 4
Question 1 ................................................................................................................................................. 4
Question 2 ................................................................................................................................................. 4
Questions 3 ............................................................................................................................................... 4
Questions 4 ............................................................................................................................................... 5
Chapter 5 & 6 Case Study
September 22, 2009
Chapter 5 Case Study
Median
Standard Deviation
1 Standard Deviation Max
1 Standard Deviation Min
Mean
Coefficient of Variation
Range
8.500
0.102811416
8.596599295
8.390976462
8.493787879
1.21%
1.117
Question 1
Are Kellerman’s calculations correct? These are the first items to verify.
Yes, Kellerman's calculations are correct.
Question 2
Take a close look at the data using appropriate statistical methods.
We calculated one standard deviation from the mean.
Question 3
Are Kellerman’s conclusions correct? If so, why do you think so? If not, why not and what should be done
instead?
Kellerman is wrong, as 8 of the 99 products are outside of one standard deviation, therefore, making
the set out of control
Page 3
Chapter 5 & 6 Case Study
September 22, 2009
Chapter 6 Case Study
Domestic Clients:
Defective
3
12
131
Non-defective
293
307
2,368
Total
296
319
2499
3114
% Defective
1.01%
3.76%
5.24%
% Non-defective
98.99%
96.24%
94.76%
Defective
255
75
81
Non-defective
1247
359
123
Total
1502
434
204
2140
% Defective
16.98%
17.28%
39.71%
% Non-defective
83.02%
82.72%
60.29%
Domestic & Overseas Clients:
Defective
Wallace
258
Lundvall
87
Jones
212
Non-defective
1540
666
2,491
Total
1798
753
2551
2551
% Defective
14.35%
11.55%
8.31%
% Non-defective
85.65%
88.45%
97.65%
Wallace
Lundvall
Jones
Overseas Clients:
Wallace
Lundvall
Jones
Question 1
Is Jones correct? That is, using the more complete data set, is it true that Jones has the lowest defect rate
overall? Are Jone’s percentages correct overall (i.e., combining domestic and overseas production)?
Yes, Jones is correct that he has the lowest combined defective rate.
Question 2
Is Wallace correct? That is, what percent of Wallace’s production was the more demanding? How does
this compare to the other two managers?
% of more demanding production:
Wallace 83.54%
Lundvall 57.64%
Jones
8.00%
Wallace is correct; his percentage of demanding work is much higher than the other two managers.
Questions 3
Look carefully at conditional defect rates given various combinations of manager and production client.
What do you find?
Page 4
Chapter 5 & 6 Case Study
September 22, 2009
Wallace seems to be the most effective manager based on his comparable percentages despite his
heavy overseas workload - his domestic percentages trump those of the other managers.
Wallace is the most effective manager. He has the lowest defect rate of all the managers in both
domestic and overseas clients. The argument could be made that the reason Jones has the lowest
combined defective rate is that the production he works on is the least demanding work. Based on this
information, Jones looks like he is the newbie of the group trying to prove his worth since upper level
management has not assigned him more of the overseas production.
Questions 4
Should you recommend that Wallace start looking for another job? If not, what do you suggest?
No, one suggestion would be to place Wallace in charge of all overseas clients. He has the lowest
percent of defects between all three managers. Additionally, the overseas clients are stricter, and are
more likely to leave the company if a certain defect rate is not kept.
Page 5