Larry George — Active Contributor

The New-Products manager asked me, “Your actuarial failure rate estimates (from vehicle registrations, bills-of-materials, and automotive aftermarket store sales) are for dead-forever parts with at most one failure. What if auto parts could be renewed or replaced more than once?” Chagrined, I wrote a spreadsheet program to estimate actuarial rates for renewal processes, without life data. But what is the corresponding estimator from grouped, cohort renewal counts like the Kaplan-Meier estimator for grouped, cohort failure counts?

Fred wrote, “I would like to suggest that you continue writing articles – make them more tutorial in nature as if teaching someone the stats from scratch that you use in your articles. Instead of loads of references to papers and procedures, explain the concepts and math involved.” OK, I’ll try.

Nonparametric field reliability estimators require no unwarranted distribution assumptions and they preserve all information in data. Here’s how to compute them, without life data, while preserving all relevant information in ships and returns counts. 

Azmat Siddiqi suggested a certification in reliability statistics in 2022. Azmat believes in knowing and using the reliability statistical information in test, installed base, failures, and service data. Thanks Azmat. 

I propose Certification in Reliability Statistics to recognize statistics knowledge, work experience, and applications. Certification in Reliability Statistics should provide assurance to employers, contractors, and collaborators that reliability statistics are estimated and used to the best extent with available data, including uncertainty quantification, with or without life data.

The LinkedIn ASQ RRD group published this question from a reliability manager. Replies included:

• “Beta (shape parameter) should be close to 1 for more useful life. But it should not be less than 1.”
• “For Beta you would like to get as close to one as possible.”
• “A Shape of 1 within warranty is good.”
• “It depends on B2B, yes it should be close to 1 that’s within warranty.

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Generations of products have similar field reliability functions because they are designed, processed, shipped, sold, and used in similar environments by similar customers. Replacement parts have similar reliability functions depending on replacement number: 1^st, 2^nd,…. 

Biostatisticians use David Cox’ proportional hazard (PH) survival function models to quantify effects of treatment or risk factors. Proportional hazard models could describe product’s failure modes, parts’ reliabilities in successive replacements, or products’ reliabilities in successive generations. [Read more…]

The (age-specific or actuarial) force of mortality drives the demand for spares, service parts, and most products. The actuarial demand forecast is Σd(t‑s)*n(s), where d(t-s) is (age-specific) actuarial demand rate and n(s) is the installed base of age s, s=0,1,2,…,t. Ulpian, 220 AD, made actuarial forecasts of pension costs for Roman Legionnaires. (Imagine computing actuarial demand forecasts with Roman numerals.) Actuarial demand rates are functions of reliability. What if reliability changes? We Need Statistical Reliability Control (SRC).

Actuarial demand forecasts require updating as installed base and field reliability data accumulates. Actuarial failure rate function, a(t), is related to reliability function, R(t), by a(t) = (R(t)-R(t-1))/R(t-1), t=1,2,… If products or parts are renewable or repairable, then actuarial demand rate function, d(t), depends on the number of prior renewals or repairs by age t [George, Sept. 2021].

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Do you want easy demand forecasts or do you want to learn and use the reliabilities of service parts and make demand forecasts and distribution estimates, without sample uncertainty? Would you like to do something about service parts’ reliability? Would you like demand forecast distributions so you could set inventory policies to meet fill rate or service level requirements? Without sample uncertainty? Without life data? Don’t believe people who write that it can’t be done!

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My wife says I am wasting my time trying to change reliability statistics, so I polled the www.linkedin.com Reliability Leadership…, ASQRRD, IEEE Reliability, “Biostatistics, and No MTBF groups. The polls claimed that “Life data, censored or not, is required to estimate MTBF, reliability function, failure rate function, or survivor function. TRUE? FALSE? or DON’T KNOW.” I am grateful for the responses.

Someone asked, “…if you can give me quick explanation: For Example, EPRD 2014 part, Category: IC, Subcategory: Digital, Subtype1: JK, Failure Rate (FPMH) = 0.083632 per (million) calendar hours! How do you convert that to operational hours?” I.e., time-to-failure T has exponential distribution in calendar (million) hours with MTBF 11.9571 (million) hours.

Did the questioner mean how to convert calendar-hour MTBF into operating-hour MTBF? David Nichols’ article does that for 217Plus MTBF predictions, based on “the percentage of calendar time that the component is in the operating or non-operating (dormant) calendar period, and how many times the component is cycled during that period.” I.e., MTBF/R where R is the proportion of operating hours per calendar hour. 

Dear Larry

Thank you for your data request for breast implant data and apologies for the delay in responding. The data available is:

• The number of women receiving implants, by year, by major manufacturer
• Number of Explants: All Manufacturers (inc. Others and Unknown Brands)

My colleagues have been copied into this email to show your request has been actioned. I hope this is helpful. [Read more…]

Email from www.smartcorp.com advertised how to forecast inventory requirements using time-series analyses: single and double exponential smoothing, linear and simple moving average, and Winters models. SmartCorp compares alternative times-series forecasts in a “tournament” that picks the best forecast. Charles Smart says forecasting, “…particularly for low-demand items like service and spare parts — is especially difficult to predict with any accuracy.”

Time series forecasts also quantify variance. Excel’s time-series FORECAST() functions do exponential smoothing, account for seasonality and trend, and “pointwise” confidence intervals. Pointwise means only one confidence interval is valid at a time; not a confidence band on several forecasts!

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What are the covariances of Kaplan-Meier reliability estimates at different ages? I need them for the variance of actuarial demand forecasts and for confidence bands on reliability. I thought cohort reliability estimate variances and covariances in the previous article were a good idea. How good? Not as good as bootstrap and jackknife resampling alternatives!

The Kaplan-Meier reliability function estimator uses right-censored and grouped time-to-failure counts in periodic cohorts (rows in table 1). The Nelson-Aalen cumulative failure rate function estimators are theoretically independent [Aalen, Nelson], but not for some examples. The Kaplan-Meier reliability and actuarial failure rate function estimates at different ages are dependent, so their covariances matter to actuarial forecasts and confidence bands on reliability.

The well-known variance of the Kaplan-Meier reliability function estimator [Greenwoood, Wikipedia] can drastically under-or over-estimate variance. The covariances of the Kaplan-Meier reliability pairs at different ages are ignored or neglected. Variance errors and covariance neglect bias the variance of actuarial demand forecasts. Imagine what errors and neglect do to confidence bands on reliability functions.

My first task at Apple Computer was to recommend the warranty duration for the Apple II computer. Apple didn’t have a warranty! So, I looked at competitors’ warranties and recommended the same, one year. I wish I had known Apple’s computers’ and service parts’ reliabilities before that recommendation; I would have used actuarial forecasts of warranty returns to compare alternative warranties. Apple’s hardware warranty is still one year. Is that equitable to Apple, its customers, and society?

Imagine observing inputs and outputs of a self-service system, without individual service times. How would you estimate the distribution of service time without following individuals from input to output? The maximum likelihood estimator for an M/G/Infinity self-service-time distribution function from ships and returns counts works for nonstationary arrival process M(t)/G/Infinity self-service systems, under a condition. A constant or linearly increasing arrival (ships) rate satisfies the condition. If you identify outputs by failure mode then you could estimate reliability by failure mode or quantify reliability growth, without life data. [Read more…]