LUML has just received an order for 500 fixtures. LUML has decided to accept the order. These will be produced under lot 2022-12 (order number 12 for 2022). There has been some concern recently about the ability to identify problems in production. At the end of the production process, before packing each fixture is inspected by a person from

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Chapter1: Making Economics Decisions
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LUML has just received an order for 500 fixtures. LUML has decided to accept the order. These will be produced under lot 2022-12 (order number 12 for 2022). There has been some concern recently about the ability to identify problems in production. At the end of the production process, before packing each fixture is inspected by a person from the “quality control office”. For Lot 2022-12, arrangements have been made to record any problem units that the inspection 
finds. The nature of the problem will also be recorded. (Somewhat surprisingly, keeping track has not been done before.) They expect that the units will be produced in a run that should last about a week. Once the run has been completed, the data on problem units will be sent to you. You are to run an analysis and summarize your results. Some detailed questions will be developed and sent over to you. And you can use your own expertise to develop any other work that you think would be useful. The expected production run is the first full week in February (Monday thru Friday or until completed). You acknowledge; say you will undertake some preparatory work; and that you 
await the data.

You agree that each unit in the run will be numbered 1 through whatever. The ultimate need, of course, is to have 500 units to ship to the customer.

**** They quality staff will record the results in a spreadsheet. For each defective 
unit, they will record. Column A: The day and the date. Columns BCD: The lot number (year & number) and unit number. Column E: The nature of the problem using a code.
1 = metal damage
2 = glass damage
3 = bulb damage
4 = switch damage
5 = other (and make a note on the fault)
If a unit has more than one problem the line will be repeated for all the needed codes. Try to also mark in italics.
Column F Word explanation
Column G the disposition 
reworked = problem was corrected
scrapped = unit could not be salvaged).
Column H any other comments from the QA people that they feel might be 
useful. They agree that the info will be sent to you at the end of the run which should be 
near the close of business on Friday. Continuing your background work, each unit of this model of light fixture will need 7.5 hours of labor. That includes the basic three-step process.
** production 5 hrs. per unit.
** inspection 2 hours per unit.
** packaging or disposing 0.5 hours per unit.

rework takes 3 additional hours per reworked unit. While waiting, you recall that Mary Walton’s book has a section on Deming’s emphasis on using data. So, you dig the book out and do a quick review. [Chose from the 7 basic techniques covered or implied by Walton’s Chapter 20 
and related items. I have no expectation that you will do super-powerful statistics 
to do formal hypothesis testing (e.g., that a difference is statistically significance). 
In most cases the answer will be fairly obvious. As Chapter 20 strongly implies, 
typically there is (a) some basic numerical answer; (b) a graphical presentation; 
and (.c.) a narrative explanation.

Q#2-1. What problems turn out to be most important? Which are least important? Please rank-order them. Show your work. Explain your reasoning.
Q#2-2. We like the idea of uniform coding of problems. Nice coordination with the Quality people! How about we come up with an “average error” by taking the average of column E for all light fixture units?
Q#2-3. Is there any evidence of a day-of-the-week-effect? [Example of a day of the month effect is the increased trading on the last business day of the month as major investors seek to re-balance their portfolio for periodic reporting.]
Q#2-4. How might we use three Deming “principles” or ideas from his “management” to improve our production process to reduce problems? Your choice as to the three to be used.
Q#2-5a. What is our direct labor productivity in order to get 500 completed units? 
Q#2-5b How about two near term suggestions on how we might improve it?
Q#2-6. Where do we go from here? Your recommendations? If none then so state so that I know you did not just forget to answer the questions. [Note: No suggestions and no recommendations is certainly one possible answer. But that seems to be a “not-very-good-answer” considering our job 
position?]
Q#2-7. Any other comments that you feel are appropriate. If none, then so say. When will we be ready to see the CEO about this if she decides that she would like some follow-up?

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