Measurement Flashcards
Characteristics of Ideal Measures
- Simple
- Easily Obtainable (ease of collection & ease of calculation)
- Precisely definable
- Objective
- Valid
- Robust
Simple
measures should be easy to understand, straighforward and understandable
Easily Obtainable
- Ease of Collection: How easy are the measures to collect?
- Ease of Calculation: How easy can you calculate useful information from the source data? Counts & simple ratios are easy to calculate.
Precisely definable
Measures should be clearly defined so that they can be applied and evaluated consistently (specific rules, being followed uniformly)
Objective
2+ observers should arrive at the same conclusion (same value) for the measure
Valid
should measure the property it is intended to measure
Robust
Measures should be insensitive to insignificant changes in the process or product
ex: in baseball, changing the height of the baseball mound is robust
Units or designations
What is the most appropriate unit of measure? Will this unit of measure be the most beneficial for ease of collection and calculation of data?
Precision
How accurate should the count be? Involves things such as determining the number of decimal places that should be used. Associated with materiality
Materiality
refers to knowing when it becomes irrelevant to be more precise with your measurement because it will have a negligible impact on the meaning of measure or the impact of the information on the decision
Types of measure
- counts
- ratios & comparisons
- averages & weighted averages
- differentiation on a characteristic
inventory variance
Actual Inventory - Expected Inventory Level, where Expected Inventory Level = Beginning Count + Purchases - Sales
defect ratios
of defective products/ total # of products
efficiency ratios
Output quality/input quality
Percent increase/decrease
(Later Value-Base Value)/Base Value
