Manufacturing

Downtime
Managerial Report

Addressed to: Peter Dalley

Authored by: Ravneet Singh

To: Peter Dalley

From: Ravneet Singh
Subject: Statistics for Business and Economics II
Introduction
In todays competitive manufacturing market, production efficiency and
effectiveness are among top business priorities. The requirements of
outstanding performance force companies to substantially consider reducing
their machines downtime frequency and its consequential costs. Equipment
downtime occurs due to planned or unplanned stops. The unplanned stops
caused by failures and disturbances occurrence are the most common
unexpected factors that have the non-trivial influence on the overall
productivity. The purpose of this paper is to present a sample of how
manufacturing companies deal with equipment downtime cost. The study
was performed by conducting a samples provided firms productivity
researcher that have sampled 30 days in past several months from all four
plant. To conclude the sample hypotheses it will include test statistics and p
Value approach.
Summary Stats
Plant 1

Mean

Plant 2

23.18824
Mean
498

Plant 3

21.92561
Mean
31

Plant 4

22.29124
Mean
835

23.45756
874

Standar 0.823616 Standar 0.866541 Standar 0.671780 Standar 0.904420

d Error 164
d Error 431
d Error 351
d Error 187
Standar
Standar
Standar
Standar
d
4.511131 d
4.746242 d
3.679492 d
4.953713
Deviatio 516
Deviatio 887
Deviatio 518
Deviatio 381
n
n
n
n
Range

18.99355
Range
578

20.69841
Range
435

15.27474
Range
035

16.54168
738

Minimu 16.09147 Minimu 12.80741 Minimu 12.72663 Minimu 14.08052

83

861

753

857

Maximu 35.08503 Maximu 33.50583 Maximu 28.00137 Maximu 30.62221

m
408
m
296
m
789
m
595
Sum

695.6473
Sum
494

657.7683
Sum
93

668.7374
Sum
504

703.7270
623

Count

30

30

30

30

Count

Count

Count

Confide
Confide
Confide
Confide
1.684484
1.772276
1.373945
1.849746
nce
nce
nce
nce
192
221
086
976
level
level
level
level

Hypothesis Test
Its claim that the average downtime of four manufacturing plants is 23
minutes as concluded from Manufacturing Downtime, At a=.05, but it
cannot be concluded that the average time is less than to 23 minutes.

H0: <= 23
Ha: > 23 (claim)
Result
For plant 1 the P-Value of 0.41 > = 0.05 this result is not significant at =
0.05 level indicating that the H0 cannot be rejected with confidence. For
plant 1 the P-Value of 0.22 > = 0.05 this result is not significant at =
0.05 level indicating that the H0 cannot be rejected with confidence. For
plant 1 the P-Value of 0.29 > = 0.05 this result is not significant at =
0.05 level indicating that the H0 cannot be rejected with confidence. For
plant 1 the P-Value of 0.61 > = 0.05 this result is not significant at =
0.05 level indicating that the H0 cannot be rejected with confidence.
Interpretation of Result
Using the rejection rules for P-value approach we have seen that at the
significance level of 0.5 the value of P is exceeding the rejection rule. So we
do not reject the null hypothesis Therefore, it can be concluded that sample
evidence that the downtime has been significantly reduced.

Confidence Intervals
Confidence intervals tell you about how correct you have determined the
mean. Assuming that the data was randomly sample and by repeating and
calculating a confidence interval of the mean from each sample, you would
expect about 95 % of those intervals to include the true value of the
population mean. The significant point is that the confidence interval tells
you about the likely location of the true population parameter. The
confidence intervals at four manufacturing plants shows us that average
downtime is efforts by both management and production workers taken to
reduce downtime across manufacturing plants nearly by 23 minutes. This will
be a positive impact on the productivity and growth of the industry. This
means that there will be less late deliveries, backlogs, orders targets will
meet on time and that can prevent loss of market shares.
Level of Significance
First, the difference between the results of the experiment and the null
hypothesis is determined. Then, assuming the null hypothesis is true the
probability of a difference that large or larger is computed. Finally, this
probability is compared to the significance level. If the probability is less than
or equal to the significance level, then the null hypothesis is rejected and the
outcome is said to be statistically significant. The lower the significance
level, the more the data must diverge from the null hypothesis to be
significant.
Conclusion
To conclude, we have seen that in all the four manufacturing plants
management and production workers made major efforts in lowering the
downtime less than 23 minutes. This will reduce the cost to the business and
increase the productivity. As from the hypotheses testing we concluded from
at =.05, can it be concluded that the average time is less than equal to 23
minutes based on a sample of 30 days over the last several years. So we do

not reject the null hypothesis as it is not significant at = 0.05 level

indicating that the H0 cannot be rejected with confidence. But it cannot be
concluded that the average time is less than to 23 minutes.