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What is a control chart
A control chart shows the performance of a particular process in relation to acceptable upper and lower limits of deviation. Performance within the limits is termed statistical control. Processes are designed to ensure that performance consistently falls within the acceptable range of error.
What is a fishbone diagram
A fishbone diagram describes a process, the contributions to the process, and the potential problems that could occur at each phase of a process. The process is represented by a single horizontal line while the contributions to the process are represented by diagonal lines that create the image of a fishbone. Fishbone diagrams provide a framework for managers to analyze the problems that contribute to the occurrence of defects.
What are nonfinancial measures helpful for?
Nonfinancial measures are an effective way to observe problems as they occur and thereby direct attention to potential errors or inefficiencies before poor financial results are produced.
Pareto diagrams
Pareto diagrams combine the elements of a histogram of quality control issues displayed in order of most to least frequent with a line graph that displays the cumulative occurrence of the problems.
Pareto diagrams represent an individual and cumulative graphical analysis of errors by type. Individual error types are represented on a histogram while the cumulative number of errors is presented on a line graph.
What are the characteristics of effective performance measures
The measure is under the control of employees.
The measure is objective and easily measured
The measure relates to the goals of the organization
The measure emphasizes both long therm and short term issues equally.
What is target Costing and how is it calculated
Target costing is a technique used to establish the product cost allowed to ensure both profitability per unit and total sales volume. It is calculated by taking the difference between Market price and Required Profit.
What are the steps to process improvement
1) Design 2) Modeling ( which involves simulation of the process) 3) Execution (including training of personnel and testing of the process) 4) Monitoring 5) Optimization
