J. R.

Clarkson Company

I. Facts of the Case

J. R. Clarkson pioneered a family-owned industrial value design and manufacturing company

in Nevada. The company is known for metal and mineral processing. Its key product is knife-
gate and become a key supplier around the world.

Clarkson Company was acquired by Tyco Valves & Controls, a division of Tyco International,
Ltd. Tyco Valves & Controls, located in Reno, Nevada in the late 1990s. As of today, the
company continues to produce, market, and distributeproducts under the Clarkson brand
name.

II. Questions and Answers

1. The successful Clarkson knife-gate valve contains a wafer that is thin and light. Yet, the wafer is
so strong it can operate with up to 150 pounds-per-square-inch (psi) of pressure on it, making it
much stronger than those of competing brands. Suppose Tyco engineers have developed a new
wafer that is even stronger. They want to set up an experimental design to test the strength of
the wafer but they want to conduct the tests under three different temperature conditions, 70°,
110° and 150°. In addition, suppose Tyco uses two different suppliers (company A and company
B) of the synthetic materials that are used to manufacture the wafers. Some wafers are made
primarily of raw materials supplied by company A, and some are made primarily of raw
materials from company B. Thus, the engineers have set up a 2 3 factorial design with
temperature and supplier as the independent variables and pressure (measured in psi) as the
dependent variable. Data are gathered and are shown here. Analyze the data and discuss the
business implications of the findings. If you were conducting the study, what would you
report to the engineers?

Answer:
We used the two by three factorial design using two-way ANOVA. There
are two independent variables, temperature and supplier. Temperature has three
treatment levels: 70°, 110°, and 150°. Supplier has two classifications levels:
supplier A and supplier B. The dependent variable is strength of the valve as
measured in psi. Shown below is Excel output for this analysis.
First, we examine the observed F for interaction which is 2.34 with a p-value of .1386. Since
interaction is not significant at any commonly used alpha, we proceed to examine main effects.
There is no significant difference between the two suppliers (F = 1.11, p-value = .31339). There is a
significant difference in the strength of the valves by temperature at = .0001. The mean psi for 70
o
is 159.83, for 110 o is 158.33, and for 150 o is 145 psi. It appears that at 150 o the valves are not as
strong.

Using MINITAB, Tukey’s multiple comparison tests were done to determine if there were any
significant differences in valve strength by temperature. The results are:

Tukey's pairwise comparisons

Family error rate = 0.0500

Individual error rate = 0.0203

Critical value = 3.67

Intervals for (column level mean) - (row level mean)

1 2

2 -5.444
8.444

3 7.890 6.390
21.777 20.277
These results show that there were significant differences between 70o and 150o and between
70o and 150o. The confirms what we observed above with the Excel output.

2. Pipeline operators estimate that it costs between $75 and $500 in U.S. currency to replace each
seal, thus making the Clarkson longer-lasting valves more attractive. Tyco does business with
pipeline companies around the world. Suppose in an attempt to develop marketing materials,
Tyco marketers are interested in determining whether there is a significant difference in the
cost of replacing pipeline seals in different countries. Four countries—Canada, Colombia,
Taiwan, and the United States—are chosen for the study. Pipeline operators from equivalent
 operations are selected from companies in each country. The operators keep a cost log of seal
replacements. A random sample of the data follows. Use these data to help Tyco determine
whether there is a difference in the cost of seal replacements in the various countries. Explain
your answer and tell how Tyco might use the information in their marketing materials.

Answer:

The results show that there is a significant difference in the cost of seal replacement between
countries (F = 32.68, p-value = .000). An examination of the means shows that there is potential
significant differences between countries (Canada - $244.29, Columbia - $323.57, Taiwan -
$195.00, and U.S. - $222.14). The results of the Tukey multiple comparison analysis shows that
there are significant pairwise differences between Canada and Columbia, between Canada and
Taiwan, between Columbia and Taiwan, and between Columbia and the U.S. Clarkson might be
very effective in marketing to Columbian companies because in Columbia the cost of replacing
the seal is significantly higher than in other countries.

3. In the late 1980s, the Clarkson Company installed a manufacturingresource planning system.
Using this and other quality improvement approaches, the company was able to reduce lead-
time from six to eight weeks to less than two weeks. Suppose that Tyco now uses a similar
system and wants to test to determine whether lead-times differ significantly according to the
type of valve it is manufacturing. As a control of the experiment, they are including in the study,
as a blocking variable, the day of the week the valve was ordered. One lead-time was selected
per valve per day of the week. The data are given here in weeks. Analyze the data and discuss
your findings.
 This is a randomized block design. The main independent variable of interest is type of valve. The
blocking variable was day of the week. Below is Excel output for a two-way ANOVA without
replication.

ANOVA
Source of Variation SS df MS F P-value F crit
Day of the Week 0.7767 4 0.1942 4.98 0.00595206 2.87
Type of Valve 6.0107 5 1.2021 30.85 0.000000010 2.71
Error 0.7793 20 0.0390

Total 7.5667 29

A highly significant observed F value was obtained for type of valve (F = 30.85 with a p-
value of .000000001). The various valve types and their associated mean lead times are:
Safety – 1.64
Butterfly – 2.12
Clack – 1.32
Slide – 1.66
Poppet – 2.18
Needle – 0.88
Since there is a significant difference in valve type and since the means appear
to be quite different, Tukey’s multiple comparisons were used to determine
which pairs of means, if any, are significantly different.

The study was attempting to control for day of the week as a blocking variable. The blocking
variable produced an F value that was significant at = .01. Lead times differ by type of valve. The
needle and clack valves have the shortes lead times and the butterfly and poppet valves have the
longest lead times. A cursory examination of the mean lead times by day of the week indicates
that Monday’s and Friday’s produce the longest lead times.