The Value of the One-Sample T Test

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The Value of the One-Sample T Test

It can prove how far you can improve
Alex Orlov

Published: 05/20/2013 Some time back, I was working as a Six Sigma Black Belt within the customer service department of a credit card organization. Our processes included responding to customer emails and mail correspondence. [ad:23486] One fine day the general manager of my process called to say we were getting additional business, and she was just about to sign the statement of work (SOW) in the next five minutes. She further communicated that one of the clauses in the SOW was to meet a quality score of 90 percent. This was a critical service-level agreement because missing this metric would mean a heavy penalty each month. She wasnt sure if this 90-percent target was achievable. She also didnt know whether the previous vendor met this threshold. Additionally, the business owner was pushing her to sign the SOW because it also stated the previous vendor met the 90-percent quality scores comfortably. I understood the scenario and its criticality. I asked if she could get access to previous vendors quality score month on month. She did have the data, and I received it in about two minutes. I opened Minitab statistical software, updated the month-on-month quality scores in the Minitab worksheet, and then checked whether the data were normal using the Anderson Darling Normality test. After confirmation, I clicked on Stat > Basic Statistics > 1-Sample t test and ran a one-tail hypothesis to check if 90 percent was a significant target. To my surprise, the resulting p-value did not agree with the business owners claim of the previous vendor meeting the quality scores comfortably. The p-value was less than 0.05, and the upper bound showed the value of 73.8 percent. This signified that the previous vendor did not meet 90-percent quality scores. The value of 73.8 percent also signified that if we continued to run the process under similar circumstances, the maximum possible score we would achieve would be 73.8 percent. By the fourth minute, I called the general manager back and advised that she should not sign a SOW at this threshold. The target would need to be negotiated to be as low as 75 percent, and we would meet this target only after the completion of our learning curve (i.e., after three to four months of migrating the process). Because this was communicated to the business owner, he realized that his deceit was noted and agreed to sign the SOW for a lower target of 75 percent. As we migrated the process, we did continue to meet the 75-percent threshold. After a few months,

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5/31/2013

The Value of the One-Sample T Test

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as the process gained stability, we completed a Six Sigma project on quality score improvement. Using the breakthrough improvements from this Six Sigma project, the team started achieving the 90-percent quality score. That is the value of one-sample t test. It helps us get the right inferences in minutes. And any decision backed by data is always a near-perfect decision. A few facts about the one-sample t test: Used for continuous data Used when the data are normal (is a parametric test) Used to compute a confidence interval Population standard deviation need not be known Its nonparametric equivalent is one-sample sign test

About The Author

Alex Orlov
Alex Orlov runs WhatIsSixSigma.NET, a site dedicated to simplifying Six Sigma and showing that its tools and methods are still working today and can be applied with great effectiveness not only to the corporate environment but also to our personal lives just as easily.

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http://www.qualitydigest.com/print/23452

5/31/2013