The Role of Statistics in Business and Industry

by Gerald J. Hahn, Necip Doganaksoy

Overview

Highlighting the relevance of statistical methods in everyday applications, The Role of Statistics in Business and Industry bridges the gap between the tools of statistics and their use in today's business world. This one-of-a-kind resource encourages the proactive use of statistics in three well-organized and succinct parts: Setting the Stage provides an introduction to statistics, with a general overview of its uses in business and industry, Manufactured Product Applications explains how statistical techniques assist in designing, building, improving, and ensuring the reliability of a wide variety of manufactured products such as appliances, plastic materials, aircraft engines, and locomotives, Other Applications describe the role of statistics in pharmaceuticals, finance, and business services, as well as more specialized areas including the food, semiconductor, and communications industries.

This book is truly unique in that it first describes case studies and key business problems, and then shows how statistics is used to address them, while most literature on the topic does the reverse. This approach provides a comprehensive understanding of common issues and the most effective methods for their treatment. Each chapter concludes with general questions that allow the reader to test their understanding of the presented statistical concepts as well as technical questions that raise more complex issues. An extensive FTP site provides additional material, including solutions to some of the applications.

With its accessible style and real-world examples, The Role of Statistics in Business and Industry is a valuable supplement for courses on applied statistics and statisticalconsulting at the upper-undergraduate and graduate levels. It is also an ideal resource for early-career statisticians and practitioners who would like to learn the value of applying statistics to their everyday work.

Product Details

ISBN-13:	9781118211465
Publisher:	Wiley
Publication date:	09/20/2011
Sold by:	JOHN WILEY & SONS
Format:	eBook
Pages:	368
File size:	3 MB

About the Author

GERALD J. HAHN, PhD, was manager of applied statistics in the Corporate Research and Development Center at General Electric (GE) for twenty-eight years, where he was named a GE Coolidge Fellow, the organization's highest honor. Dr. Hahn is the coauthor of Statistical Models in Engineering and Statistical Intervals: A Guide for Practitioners, both published by Wiley.

NECIP DOGANAKSOY, PhD, is a Statistician and Principal Technologist at General Electric's Global Research Center and is also Adjunct Professor in the School of Management at Union Graduate College. A Six Sigma Master Black Belt, Dr. Doganaksoy has written over fifty papers and journal articles on statistical applications in quality, reliability, and productivity improvement.

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Table of Contents

Major Applications     xi
Preface     xiii
Acknowledgments     xvii
Setting the Stage
Statistics: An Overview     3
About This Chapter     3
What Is Statistics?     3
Areas of Application     4
Statistical Literacy     7
Better Decisions Require Better Data     12
Statistical Thinking     12
Related Disciplines     13
Major Takeaways     15
Discussion Questions     16
Statistics in Business and Industry     18
About This Chapter     18
Evolution of Statistics for Manufactured Product Applications     18
Applications Beyond Manufactured Products     24
Forces Impacting the Use of Statistics Today     24
Major Takeaways     30
Discussion Questions     31
Manufactured Product Applications
Product Design: Concepts     35
About This Chapter     35
The Product Design Process     35
Setting the Design Goals     38
Ensuring Measurement Capability     45
Design and Development     49
Design Validation     64
Transition to Manufacturing     65
Major Takeaways     67
Discussion Questions     68
Product Design: Example     70
About This Chapter     70
Thermoplastic Resin for Child Car Seat: Introduction     70
Some Basic Elements of Plastic Part Design and Manufacture     70
Setting the Design Goals     71
Ensuring Measurement Capability     75
Design and Development     75
Design Validation     83
Transition to Manufacturing     83
Major Takeaways     86
Discussion Questions     86
Product Reliability Assurance     88
About This Chapter     88
The Key Role of Reliability     88
Design for Reliability: The Need     90
The Process and the Participants     90
Setting Reliability Goals     91
Reliability Evaluation of a Conceptual Design     94
Product Reliability Development     98
Reliability Validation     112
Product Safety     116
Reliability Growth Analysis     118
Product Burn-In     120
Software Reliability     120
Further Reading     121
Major Takeaways      121
Product Life Distributions and Concepts     122
Discussion Questions     126
Manufacturing Quality Improvement: Concepts     129
About This Chapter     129
The Need for Manufacturing Quality Improvement     129
Different Industries     130
Considerations in Manufacturing Quality Improvement     131
Disciplined Approaches to Manufacturing Quality Improvement     134
Quality Assessment and Improvement     135
Statistical Monitoring     141
Major Takeaways     146
Discussion Questions     147
Manufacturing Quality Improvement: Example     149
About This Chapter     149
Generator Stator Bar Example     149
Manufacturing Capability and Stability Assessment     151
Addressing Measurement Error     153
Reducing Deviations from Target and Variability     155
Statistical Monitoring     160
Discussion Questions     160
Product Manufacturing: Further Applications     162
About This Chapter     162
Integrating Engineering Process Control and Statistical Process Control     162
Polymer Resin Example     165
Materials and Parts Quality Assurance     168
Final Product Assessment     169
Productivity Improvement     171
Major Takeaways     174
Discussion Questions     175
Product Field Support     176
About This Chapter     176
Reliability Data Tracking     176
Reliability Data Tracking for Nonrepairable Products     177
Reliability Data Tracking for Repairable Products     186
Planning the Failure Reporting System     188
A Note on Product Safety     190
Tracking Customer Satisfaction     191
Competitive Evaluations and Advertising Claims     192
Proactive Product Servicing     194
Major Takeaways     198
Discussion Questions     199
Other Applications
Pharmaceutical Products     203
About This Chapter     203
Drug Development: Process Overview     204
The Role of a Pharmaceutical Statistician: An Overview     205
Preclinical Studies     208
Clinical Studies     214
Case Study: Phase 2 Clinical Trial     217
Regulatory Review     228
Some Other Applications     229
Some Statistical Tools Used in Pharmaceutical Applications     231
Sources of Further Information     231
Major Takeaways     232
Discussion Questions     232
Financial Services     235
About This Chapter     235
Financial Services and Its Uncertainties     236
Credit Scoring for Consumer Loan Approval     238
Credit Scoring Example     239
Model Development and Implementation: Some Important Nitty-Gritties     243
Modeling in Credit Management: A Broader Look     251
Specific Application Areas     253
Statisticians in Financial Services     261
Further Reading     262
Major Takeaways     262
Discussion Questions     263
Business Processes     265
About This Chapter     265
Business Processes     265
Example: Improving the Loan Decision Process for a Business Equipment Financing Company     271
Steps for Process Improvement     281
Another Example: Improving the Skip Tracing Process     286
Some Further Concepts and Methods     288
Operations Research and Management Science     289
Major Takeaways     294
Discussion Questions      295
Further Applications     297
About This Chapter     297
Food, Beverage, and Related Industries     297
Semiconductor Industry     302
Communications Industry     305
Statistical Image Analysis for Medical, Security, and Other Applications     307
Other Application Areas     312
Emerging Areas: A Glance into the Future     316
Major Takeaways     318
Discussion Questions     319
References     321
Index     335

Preface

Gerald J. Hahn, PhD, was manager of applied statistics in the Corporate Research and Development Center at General Electric (GE) for twenty-eight years, where he was named a GE Coolidge Fellow, the organization's highest honor. Dr. Hahn is the coauthor of Statistical Models in Engineering and Statistical Intervals: A Guide for Practitioners, both published by Wiley.

Necip Doganaksoy, PhD, is a Statistician and Principal Technologist at General Electric's Global Research Center and is also Adjunct Professor in the School of Management at Union Graduate College. A Six Sigma Master Black Belt, Dr. Doganaksoy has written over fifty papers and journal articles on statistical applications in quality, reliability, and productivity improvement.

Editorial Reviews

The wealth of applied examples and clear language will attract student readers and keep their attention whilst reading what is at times highly technical information.”   (Significance, 1 March 2011)

"This book is not just of interest to statisticians, but may be even more valuable to professionals outside of our area, such as managers and engineers, who are frequently involved in data-based decisions...  I appreciate the authors’ strategy to motivate statistical tools by first posing the business problem or industrial question of interest. Every chapter of the book concludes with a summary of “Major Takeaways” and a set of useful and stimulating discussion questions. The book can also serve as a resource for aspiring statisticians, providing insight into the daily work of our profession." (The American Statistician, August 2009)

"The Role of Statistics in Business and Industry is a perfect name for this book. The authors provide a powerful discussion on the challenges of business and industry and how statistics and statistical thinking fit in attaching those challenges. The book is meaningful, relevant and valuable to students, educators, technical professionals, managers and executives in their quest to field highly-reliable products, services and organizations to meet the challenges of today's marketplace." (Journal of Quality Technology, April 2009)

"With its emphasis on real-world problems and applications, this is a good handbook for all statisticians in the manufacturing field. It also could be used in graduate or industrial training classes." (Quality Progress, April 2009)

"This book is meaningful, relevant and valuable to students, educators, technical professionals, managers and executives in their quest to field highly-reliable products, services and organizations to meet the challenges of today’s marketplace." (Journal of Quality Technology Vol. 41, No. 2, April 2009)

"Highlighting the relevance of statistical methods in everyday applications, the book addresses more than 45 application areas that keep the use of statistics fresh and pertinent." (Entrepreneur, 2009)

"Undergraduate students will find valuable connection points with the basic theory they are learning while manufacturing the managers overseeing projects on statistics will find valuable enlightenment here." (MAA Reviews, December 2008)

"This book is a unique resource guide that addresses relevant problems and case studies in the areas of business and industry prior to any discussion of the statistical methods necessary to resolve these problems. Highly recommended.(CHOICE, December 2008)

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