Operations Management Dr. Ron Lembke Candy Capability Operations Management Dr. Ron Lembke

Tolerance Limits for food? Underfilling who would notice? Overfilling – would anyone care?

Packaged Goods What are the Tolerance Levels? What we have to do to measure capability? What are the sources of variability?

Production Process Mix % Wrong wt. Wrong wt. Candy irregularity Make Candy Make Candy Make Candy Mix Package Put in big bags Make Candy Mix % Wrong wt. Wrong wt. Make Candy Make Candy Candy irregularity

Weighing Package and all candies Before placing candy on scale, press “ON/TARE” button Wait for 0.00 to appear If it doesn’t say “g”, press Cal/Mode button a few times Write weight down on form

Candy colors Write Name on form Write weight on form Write Package # on form Count # of each color and write on form Count total # of candies and write on form (Advanced only): Eat candies Turn in forms and complete wrappers

Your Job Write down package # Optional: Weigh package and candies, all together, in grams and ounces Write down weights on form Optional: Open package, count total # candies Count # of each color Write down Eat candies Turn in form and empty complete wrappers for weighing

Grams or Ounces?

Peanut Candy Weights Avg. 2.18, stdv 0.242, c.v. = 0.111

Plain Candy Weights Avg 0.858, StDev 0.035, C.V. 0.0413

Mini Candy Weights Avg 0.288, StDev 0.020, C.V. 0.070

Peanut Color Mix website Brown 17.7% 20% Yellow 8.2% 20% Red 9.5% 20% Blue 15.4% 20% Orange 26.4% 10% Green 22.7% 10%

Plain Color Mix Class website Brown 12.1% 30% Yellow 14.7% 20% Red 11.4% 20% Blue 19.5% 10% Orange 21.2% 10% Green 21.2% 10%

So who cares? Dept. of Commerce National Institutes of Standards & Technology NIST Handbook 133 Fair Packaging and Labeling Act

NIST Fines Don’t get caught It’s embarassing You’ll look dumb

How Many Servings? 264.8g /36g = 7.35 servings

Not for Retail Sale Why Not? Ingredients Nutritional information Peanut/allergy information Need room for cute pics Process variability?

Acceptable?

Sampling Plans for Category A

Package Weight “Not Labeled for Individual Retail Sale” If individual is 18g MAV is 10% = 1.8g Nothing can be below 18g – 1.8g = 16.2g

Too Much Variability 10.9% of sample below 16.2g! Avg= 17.57, stdev 1.42

Suppose they wanted to Stated weight = 18g, MAV = 16.2g Suppose want 99.7% chance nothing below MAV Set the average to be 3σ above MAV σ = 1.42g, so set Avg = 16.2 + 3*1.42 = 20.46 You pay for 18g, they give you 20.46g! 13.7% Free! They have to give away 1/7th of the candy! Clearly, they aren’t going to do this!

Summary Many reasons M&M’s “Not for Individual Sale” Process variability seems to be an important one, if not the major one Process variability is a very important consideration for companies. BTW, one bag was 223.6g < 264.8