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However, we shall accept the entire lot of these bottles produced in a given time period, if a random sample taken from the lot shows an average of no more than 12.10 ounces and no less than 11.90 ounces.
Carrying of inventory is a necessity, and proper planning and control of inventories reduces the level of stock to minimum desirable.
These inventories are necessary for the following reasons.1.
For example, if we want to test the extent of damage a car incurs in a head-on crash at 30 miles per hour, we cannot subject every car to the test.
Only a small percentage of the total cars produced can be so tested and the results applied to all cars.
A lead time is the time gap between ordering and receiving goods.
If this lead time is long or uncertain, then it is necessary to keep adequate stock of inventory as a buffer against shortages.For example, we may be interested in the average weight of Pepsi bottles.Let us assume that the average weight is designed to be 12 ounces in each bottle.Accordingly, in most cases a representative random sample from the production run is taken and tested and conclusions drawn about the production lot on the basis of the results obtained from the sample.One technique that is available for such type of quality control is known as, “Statistical Quality Control”.Complete Essay on the Statistical Quality Control of a Product!There are numerous ways to maintain product quality. For example, all parachutes are inspected after production because even one defective parachute could become dangerous to use.Since, by law of nature all finished goods are not going to be exactly the same, some limits or tolerances must be set so that if the finished product falls within these set limits, then it can be considered of acceptable quality. The process of taking a random sample of predetermined size from the production lot and determining the acceptance or rejection of the lot on the basis of sample measurements is known as “acceptance sampling”.Acceptance sampling is simply a statistical method which enables us to make the decision of either accepting or rejecting the entire lot based upon the inspection of a sample of items from the lot. First, it is more economical as compared to 100 percent inspection, in terms of inspection costs.Second, it may be more accurate than 100 percent inspection it allows less opportunity for “inspection fatigue,” which can be responsible for mistakes.Third, less product damage occurs since it requires less handling of the product.