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Business Statistics - Statistical Process Control - Assignment Example

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This paper "Business Statistics - Statistical Process Control" focuses on the SPC which was developed by Walter A. Shewhart in the early part of the 20th century; it is a set of statistical techniques that helps an organization to ensure that its processing is operating to its maximum capacity. …
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Business Statistics - Statistical Process Control
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Download file to see previous pages The Special Cause variations are the ones that need to be attended to, as these are variations caused by issues or problems with the manufacturing process; like the wear and tear of appliances and changes in material quality. Slight variations in the product are expected due to the natural cause variations, and SPC can be used to identify when action needs are taken to rectify the processes; and also to identify when the variations are not significant enough to require attention. It is thus also a means of saving resources that may otherwise have been spent in addressing a small issue that is not cost effective.
Constant mapping of product quality helps in identifying points in time that could be cause for concern by isolating times of excessive variation. When such a situation is spotted, Pareto Diagrams – amongst other techniques can help in identifying the causes of these variations; and the feasibility of responding to them.
A Pareto chart is a chart that maps both the individual categories under survey as well as the cumulative total of the categories. Each category is represented as a bar, and the categories are ranked from the one causing most variation to the one causing the least. The cumulative total is represented as a line graph and is most often curved to form a concave line. The left vertical axis represents the frequencies and the right vertical axis, the cumulative percentage. The horizontal axis represents the categories under study. The chart thus helps us identify the categories that are most in need of being addressed. It also helps us identify which categories it would not be cost-effective to focus on.
There are two types of Pareto charts – the Counts chart, and the Cost chart. The Counts chart helps in understanding which of the units have the most flaws; while the Cost chart helps in identifying the category that is incurring the most cost.    ...Download file to see next pagesRead More
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