Folks, let's see how Patty is doing at Ivy U.....

Patty had to admit that she really liked being a professor at Ivy University. No, that wasn’t strong enough; she was ecstatic. The combination of the stimulating and collegial environment and the flexible schedule was terrific. She was able to play a little more golf and spend more time with Rob and the boys.

In addition to developing a course on manufacturing processes, she was asked to teach an additional offering on statistics. Engineering enrollments had increased so much that another stats class was needed. Teaching stats gave her an opportunity to delve into topics she was interesting in learning more about, such as non-parametric analysis, cluster analysis, and numerous other statistical concepts.

She was also happy for Pete. As much as he enjoyed working with her at ACME, he, too, was thrilled to be at Ivy U. As a research associate, he spent a lot of time working with students on projects for their classes. He was surprised at how grateful the students were for his practical experience.

As Patty was thinking these pleasant thoughts in her office, suddenly Pete was at the door.

“Hey, Professor Coleman! The folks we left behind at ACME are being asked, forced really, to guarantee zero defects by examining a small sample size, say 20 samples,” Pete announced. Pete had stopped calling her “kiddo” and now teased her by calling her “Professor Coleman.”

“We both know that’s impossible. Tell me more,” Patty answered.

“Well, ACME just hired our favorite SMT engineer ... after Hal Lindsay,” Pete responded.

“Oh, no! Not Reggie Pierpont,” groaned Patty.

Reggie was a well-meaning sort of chap who had some good ideas. But, his follow through was often sloppy and only touched the surface of what was needed from an engineering perspective. He was a very good salesman of his ideas and had a following in some SMT circles.

“What is he foisting on ACME?, Patty asked.

“A zero defect program,” Pete replied.

“Sounds like a worthy goal. But, let me guess, he has convinced everyone that they can demonstrate with 95% confidence they have zero defects by only sampling 20 units,” Patty said.

“Precisely,” Pete chuckled.

“I’ll contact Mike Madigan,” Patty said.

Patty had agreed to Mike’s request that she be available to consult for a year or so. And, he also made her promise to contact him if she knew they were doing something foolish.

Patty sent Mike an email with her concerns, and with some analysis. She suggested a teleconference.

Time passed quickly and, before they knew it, Patty and Pete were on a telecon with Madigan, Peirpont, and a few staff people.

Their discussion started with the good points of a zero defects program. On this topic, everyone was in agreement. Eventually, Madigan grew impatient.

“Peirpont! According to Coleman, your assessment that we only need to sample 20 units to demonstrate zero defects with 95% confidence is bull s__t.” Mike began, always getting quickly to the point.

Patty then said, “Let’s let Reggie explain his analysis.”

“Well it’s simple,” Reggie began. “All you have to do is recognize that 1 is 5% of 20, so if you sample 20 and don’t get a defect you can be 95% confident you have no defects,” he finished.

“Yikes,” Patty thought.

“Well, Coleman?” Madigan asked.

“That approach is not correct. A correct method is what I sent to Mike in an email” Patty answered.

"Before we begin the analysis, look at the photo I sent. The red bead is one bead in 2,000 white ones. Ask yourself how you could detect this one "defect" by sampling only 20 beads?" Patty said.

There was some murmuring and groaning, Patty could tell this visual really help to define the issue.

“OK, Patty. Please explain your analysis,” Mike asked.

“Let’s say that the defect level is 1 in a thousand. If I sample the first unit, the chance it is good is 0.999. What is that chance that the first two units would be good?” Patty began.

“0.999*0.999,” Pete answered.

“Correct!” Patty said.

“Let’s say I keep sampling until the likelihood that I have still found no defects is 0.05,” Patty went on.

“Let me take this one,” Madigan said.

“You now have 0.999^n = 0.05. So there is only a 0.05 chance you would not have found a defect if the defect rate is one in a thousand,” Madigan continued.

“So what could you say about the defect rate if you found no defects in n units? Patty asked.

“I got it! I got it!” Madigan shot back enthusiastically.

Patty was incredulous. Mike Madigan, CEO of multibillion dollar ACME Corp, was like a second grader excited to show the teacher he understood.

“You can say that the defect rate is 1 in a 1000 with a confidence of 1–0.05, or 95%,” Madigan said with excitement.

“Actually, you can say that the defect rate is 1 in a thousand or less,” Patty said.

“But we need to know n,” Madigan implored.

“Well, let’s solve for n with logarithms,” Patty suggested.

Groaning was heard over the telecon. No one likes logarithms!

Since their telecom was on GoToMeeting, Patty showed the solution:

n = log 0.05/log .999 = 2994.23

“Man! So we have to sample almost 3,000 units with no defects to demonstrate 1 defect per 1,000 or less?” Madigan asked with disappointment in his voice.

“Yes," Patty responded.

She continued, “It ends up with a good rule of thumb. Since n is close to 3,000, let’s say that is the number we need to analyze. To demonstrate 1 in 10,000 defects or less, n is 30,000, one in a million or less, and n is 3 million.”

“So, n is 3 times 1 divided by the defect level you are trying to establish?” Madigan asked.

“Exactly,” Patty answered.

Patty wrote it on the Powerpoint slide:

*To establish a certain defect level or less with 95% confidence, one must sample n units with no defects*

*n = 3 x 1/defect level*

“That means to establish zero defects, we need an infinite sample,” Madigan sighed.

“Yep!” Patty replied.

“Peirpont! What do you have to say for yourself?” Madigan barked.

“Well, in the first case, Patty said 1 defect per thousand or less. It still could be zero defects,” Peirpont responded glumly.

Patty was going to respond, but Madigan beat her to it.

“But, you can’t prove it is zero. Only 1 in a thousand or less. So, to be conservative, we would say that the defect level would be 1 in a 1,000. That’s what is proved,” Madigan opined testily.

The meeting ended with Madigan expressing his thanks, an unusual thing for him. Peirpont said little else. It was clear he was probably going to get a talking to by Mike Madigan.

Patty was a little wistful after the meeting. She missed ACME and the folks there, even the occasionally cranky Mike Madigan. But, everyday she felt more like her home was at Ivy U.

Cheers,

Dr. Ron

Epiloque:

As with all Patty and the Professor posts, this one is based on a true story. After sharing this concept with a colleague who had to get FDA approval for drug trials, she decided to ask statistician job applicants: "Do you think you could develop a sampling plan that could assure with 95% confidence that there were no defects in a population?" The last I talked to her, most job candidates had said yes.........