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P Value Usage

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  • #48717

    mcintosh
    Participant

    Hi,
    I am new to six sigma and am trying to understand a couple of things.
    1) Why do we use the p value to determine if data is stable etc ? Why Specifically 0.05 why not 0.1 ?
    2) What is the difference between Percentages and Percentiles.. Is Span a good metric to look at while doing projects ?
    Rgds,
    Tom.

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    #165126

    Ward
    Participant

    My quick response is we don’t use p-values to assess the stability of a process, we use control charts to help distinguish random from non-random variation..05 is a default value, but you should not be “blinded” by it. It is completely appropriate to change that to .10 or .01 in some cases. It helps you assess risk of over reacting (rejecting the null when you shouldn’t have).Span (Range, Standard deviation, Variance and Sum of Squares) are all ways to describe variability in the data (process). Welcome to the Discussion Forum

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    #165133

    mcintosh
    Participant

    Thanks for the quick reply Pete. I surely want to start learning more and what better place than isixsigma.
    I beleive when i said p values for Stability i was referring to the fact that we use the p value for clusters, mixtures, trends and oscillations to figure out if the data is stable ..we also look at P value for normality . How did the whole 0.05 concept come into place ? I would love to get into training one day and i am sure its something i as a student would definitely ask.
    Also, am still trying to understand the difference between percentile and percentages ?
    Rgds,
    Tom

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    #165143

    watkins
    Member

    The concept of 0.05 refers to alpha risk, which is a pretty fundamental tenet of hypothesis testing.  For any test, we state in advance how willing we are to tolerate the chance that we’ll end up rejecting the null hypothesis when we shouldn’t.  Generally speaking, classroom settings advocate an alpha risk of five percent, simply because of existing practice and norm.  However, pharmaceutical companies bringing a drug to market might have to conduct tests using an alpha of 1 percent, while a low-risk business process might opt for 10 percent.  It simply depends.
    A percentile is a threshold or level in a series of ordered observations, while a percentage is simply a fraction or proportion of the series with a particular characteristic.  For example, out of 500 graduating students, students in the 95% percentile are those students in the top five percent – or the top 25 – of all 500 students based on final grade.  As another example, if 200 of these students are boys, then boys make up 40% of the class.

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