ISOM3730

Acceptance Sampling
 An overview…

Process of Pros and Cons Illustration of a

Producer’s and
acceptance of acceptance single-sampling
Consumer’s Risk
sampling sampling plan

Economic Double or
Measures to Computation of
Model / Multiple
evaluate probability of
In-process Sampling
sampling plans accepting a lot
inspection Inspection
 Process of Acceptance Sampling

Send to
Accept the
production or
lot
Result to customer
Sample
Lot received compared
selected
for with
and
inspection acceptance
analyzed
criteria
Reject the Decide on
lot disposition
 Pros and Cons for Acceptance Sampling

üProvides an assessment of risk

üInexpensive and suited for destructive testing

üRequires less time than other approaches

üRequires less handling

Pros
üReduces inspector fatigue
 Pros and Cons for Acceptance Sampling

× Does not make sense for stable processes

× Is non-value-added

× Only detects poor quality; does not help to

prevent it

× Does not help suppliers improve Cons

 Illustration of a Single Sampling Plan

• Your supplier submits a lot of 200

watches and you want to do N = 200
acceptance sampling.
• The inspection plan is to take 30
samples randomly. n = 30
• If 3 or fewer are defective, we will
accept the shipment. Otherwise, we =?
will reject the shipment and return d (randomized)
the whole lot to the supplier.
c =3
 Illustration of a Single Sampling Plan

Incoming lot
Sampling
n =d30
N = 200

Lot received for inspection

 Illustration of a Single Sampling Plan

Incoming lot
Sampling
n =d30
N = 200

Sample randomly selected and analyzed

 Illustration of a Single Sampling Plan

Defective units
Incoming lot
Sampling
n = 30 d
N = 200

d defective units are found in n

*** 0 ≤ d ≤ n ***
 Illustration of a Single Sampling Plan
Acceptance number
(decision variable)
Defective units

c
d
3 1

Results compared with acceptance criteria

 Illustration of a Single Sampling Plan
Acceptance number
(decision variable)
Defective units

c
d
3 1

ACCEPT
 Illustration of a Single Sampling Plan

Acceptance number
Defective units
(decision variable)

c d
3 5
 Illustration of a Single Sampling Plan

Acceptance number
Defective units
(decision variable)

c d
3 5

REJECT (Sometimes followed by 100% inspection)

 Alpha risk and Beta risk
Limitations of Acceptance Sampling
State of Nature
Product is good Product is defective
Consumer accepts product ✔ Consumer's risk β
Outcome
Consumer rejects product Producer's risk α ✔
 Alpha risk and Beta risk
State of Nature
Product is good Product is defective
Consumer accepts product ✔ Consumer's risk β
Outcome
Consumer rejects product Producer's risk α ✔

• Producer’s risk ( α ) / Type I error

• P{reject lot | quality acceptable}
• Producers are unlucky that the consumer rejects a good lot
• Goal of acceptance sampling: to reduce α at a acceptable level
• Industry standards = 0.05
 Alpha risk and Beta risk
State of Nature
Product is good Product is defective
Consumer accepts product ✔ Consumer's risk β
Outcome
Consumer rejects product Producer's risk α ✔

• Consumer's risk ( β ) / Type II error

• P{lot accepted | poor quality}

• Consumers have made judgements inaccurately by accepting a bad lot

• Usually = 0.1
 Alpha risk and Beta risk
State of Nature
Product is good Product is defective
Consumer accepts product ✔ Consumer's risk β
Outcome
Consumer rejects product Producer's risk α ✔

N
n d
50
1,000
ACCEPT 0
 Alpha risk and Beta risk
State of Nature
Product is good Product is defective
Consumer accepts product ✔ Consumer's risk β
Outcome
Consumer rejects product Producer's risk α ✔
50
Sample taken_no
defective unit
200

N Total # of
defective units
1,000
Other units with
750 acceptable
quality
 Alpha risk and Beta risk
Limitations of Acceptance Sampling

State of Nature
Product is good Product is defective
Consumer accepts product ✔ Consumer's risk β
Outcome
Consumer rejects product Producer's risk α ✔

Any ways to prevent α and β ? 100% inspection!

But will it be a feasible choice?

 Acceptable Quality Level (AQL)

• Maximum % of defective items in a lot that can be considered

acceptable as quality requirements

• A decision that consumers make a priori with their suppliers

• e.g. AQL = 1.5%
• As a consumer, I am willing to accept 1.5% defective items in the
lot , but no worse than that!
 Acceptable Quality Level (AQL)

• A basis to calculate α

• α = P{lot rejected | % defective in lot} à α = P{lot rejected | AQL}

• If the defective rate is at 1.5%, I am supposed to accept the lot.

• But I reject lot because the sample I take randomly does not look good
• Type I error (α / producer’s risk)
 Limiting Quality Level (LQL)

• Also known as Lot Tolerance Percent Defective (LTPD)

• % of defective units in a lot that the quality level is so poor that it is

intolerable
• e.g. LQL = 9%
• If you send me a lot with 9% defective goods, I am not going to
accept.
 Limiting Quality Level (LQL)

• A basis to calculate β

• β = P{lot accepted | % defective in lot} à β = P{lot accepted | LQL}

• If you send me a lot with 9% defective goods, I should not accept

the lot.

• But the sample looks very good that I choose to accept the lot.
• Type II error ( β / Consumer’s Risk)
 AQL vs. LQL

• AQL is the average quality level over a series of lots

• e.g. a process is operating at a AQL 4%
• then it is accepted that 4%, on average, will be nonconforming

• LQL is lot-to-lot based

• the quality limit in an individual lot that should not be accepted
• When you ship me 50 lots next month, no lot can exceed this level of
defective items
 Computation of the probability of accepting a lot

e = 2.718281828…
• Suppose p = true % defective in a lot (quality)
• p = 0 à no defective units ; p = 1 à the whole lot is defective
• P{accepting lot | p}
c
ænö d
= å ç ÷
çd ÷
d =0 è ø
p (1 - p) n -d
(binomial)

c - np d
e (np)
≈
å
d=0 d!
(Poisson, for very small p)
 Computation of the probability of accepting a lot
• P{accepting lot | p}
c
ænö d
=
å ç ÷
çd ÷
d =0 è ø
p (1 - p) n -d (binomial)

• It sums up the probabilities of accepting the lot from 0 to c

• Rejection probability: 1 – acceptance probability

• Why 0 to c? If d is greater than c, you will reject the lot!

• Why binomial? It is either not defective (1-p) or defective (p)

 Computation of the probability of accepting a lot

• Problems with binomial!

• Not user-friendly as there are a lot of combinations for binomial formula
• More likely we will use Poisson to approximate the binomial

• P{accepting lot | p}
c - np d
e (np)
• ≈
å
d=0 d!
(Poisson, for very small p)
 Computation of the probability of accepting a lot

• A manufacturer receives large batches of components and decides to institute

an acceptance sampling scheme. The following plan is considered, which
requires a sample of 30 components to be tested:

• Accept the batch if two or fewer non-conforming component are found,

otherwise reject.

• Find the probability of accepting a batch containing 2% non-conforming units

 Computation of the probability of accepting a lot

• a sample of 30 components to be tested

• n = 30

• Accept the batch if two or fewer non-conforming component are found,

otherwise reject.
• c = 2 è accept if d = 0 / 1 / 2

• 2% non-conforming units
• p = 0.02
 Computation of the probability of accepting a lot
c
e - np (np) d
• Using Poisson Table å
d=0 d!
• np = 30 × 0.02 = 0.6
n = 30
•d=0,1,2
• Refer to the Poisson Table p = 0.02

d=0,1,2
c=3
*if we accept*
 Computation of the probability of accepting a lot

np = 0.6

d=0,1,2
*if we accept*

• The Probability of accepting the batch

• = 0.5488 + 0.3293 + 0.0988 = 0.9769

Operating characteristic curve
Pa = probability of acceptance c
ænö d
1 å ç ÷
çd ÷
d =0 è ø
p (1 - p) n -d

p = 0 in N
(c ≥ 0, we always accept)

b
Closer to 1

0 AQL LQL % defective (quality)

 Operating characteristic curve
Pa = probability of acceptance
p = 0 in N
Rejection 1
(c ≥ 0, we always accept)
a
Probability
Type I error / α / Producer’s risk:

=P{reject lot | quality acceptable}

Acceptance
Probability = P{lot rejected | AQL}

Closer to 1

0 AQL % defective (quality)

Operating characteristic curve
Pa = probability of acceptance
1

Type II error / β/ Consumer’s risk:

=P{lot accepted | poor quality}

= P{lot accepted | LQL}

b
Closer to 1

0 LQL % defective (quality)

Operating characteristic curve
Ideal operating characteristic curve

• Set up the acceptance criteria

• Better than that, always accept
• Worse than that, always reject

• No Type I and Type II error

Ideal operating characteristic curve

• An IDEAL case only!

• This is achievable only when you do 100%

inspection.

• If you do acceptance sampling, there will

always be type I and type II error, which results
in the OC curve you see in previous slides!
 Operating characteristic curve

• Increasing n à OC curve shifts to left

• I take 50 samples, but I only allow 2
defective units.

• I take 200 samples, but I only allow 2

defective units.

• Samples taken ↑ / acceptance number —

è more difficult to accept a lot
 Operating characteristic curve
N = 2000
• Increasing c à OC curve shifts to right n = 50
c=3
N = 2000
• I take 50 samples, but I allow 0 n = 50
c=2
defective unit. N = 2000
n = 50
c=1
• I take 50 samples, but I allow 2
N = 2000
defective units. n = 50
c=0

• Samples taken —/ acceptance number ↑

è easier to accept a lot
 Measures to evaluate sampling plans
1. Average Outgoing Quality (AOQ) [NOT AQL!]

(a) If p is the % defective in lot, then $

𝑛 !
(i) lot accepted with probability ! 𝑝 (1 − 𝑝)%&!
𝑑
!"#
• quality ≈ p

• The sample is a small enough proportion of the lot that if any nonconforming
items are found in the sample and replaced with conforming ones, the quality
level of the lot is not significantly affected.
 Measures to evaluate sampling plans
1. Average Outgoing Quality (AOQ)

(a) If p is the % defective in lot then $

𝑛 ! %&!
(ii) lot rejected with probability 1 - ! 𝑝 (1 − 𝑝)
𝑑
!"#
• quality = 0

• Rectifying inspection (i.e. 100% inspection) is performed for the lot after it is
rejected through sampling plan

• All defective units are replaced

 Measures to evaluate sampling plans
1. Average Outgoing Quality (AOQ)
$
n ! %&!
𝑁−𝑛
𝐴𝑂𝑄 = ! 𝑝 (1 − 𝑝) ×𝑝×
𝑑 𝑁
!"#

• Suppose N = 2000, n = 50, c = 2, p = 0.02

 Measures to evaluate sampling plans
2. Average Outgoing Quality Limit (AOQL)

Max 𝐴OQ
• AOQL = !"#"$
AOQ

AOQL

• The worst average quality that can

leave the inspection stage, assuming
P
rectification % defective (incoming quality)
 Measures to evaluate sampling plans
3. Average Total Inspection (ATI)
•n if lot accepted
•N if lot rejected (followed by 100% sampling)

Average Total Inspection

= nP{lot accepted} + N[1 - P{lot accepted}]
 Measures to evaluate sampling plans
3. Average Total Inspection (ATI)

• Suppose N = 2000, n = 50, c = 2, p = 0.02

• ATI = nP{lot accepted} + N[1 - P{lot accepted}]

 Double or Multiple Sampling Inspection

Accept Accept

Second Further
First Sample
Sample Sampling

Further Reject Reject

Sampling
 Double or Multiple Sampling Inspection

• When do we have to do a double sampling?

• d1 = no. of defective items in sample 1

• c1 = acceptance no. of first sample
• r1 = rejection no. of first sample

• If c1 < d1 < r1, then take the second sample

 Considerations for multiple sampling

Advantages
üPsychological advantage (second
chance)
üInspection cost is lower since less
number of units would be inspected
Disadvantages
× Power of discrimination may drop
× Difficulty of training inspectors
(more difficult to understand)
× Higher costs (in recording, training)
× Less information unfold
× Need for "quick" decisions
 Next Topic: Economic Model

• C1 = cost of inspection and removal of nonconforming item

• C2 = cost of repair
• p = true fraction nonconforming

• Breakeven Analysis: p*C2 = C1

If p > C1 / C2 , use 100% inspection

If p < C1 / C2 , do nothing
 Advanced Topic: In-process Inspection
• What to inspect?

– Key quality characteristics that are related to cost or quality (customer

requirements)

• Where to inspect?

– Key processes, especially high-cost and value-added

• How much to inspect?

– All, nothing, or a sample