Management And Accounting Web

# Discussion Questions Related to Statistical Process Control

Provided by James R. Martin, Ph.D., CMA
Professor Emeritus, University of South Florida

1. In developing a control chart, the analyst recognizes that there are two types of variation in a system. One type of variation is produced by common causes and the other type is generated by special causes. Explain the difference. (See Chapter 3 Part II, Deming Chapter 8 and Nolan & Provost).

2. Why is it important for management to know whether a variation in performance came from common causes or special causes? (See Chapter 3 Part II and Deming Chapter 8 and Nolan & Provost, Roehm & Castellano, Roehm, Weinstein & Castellano, Reeve 89 and Francis & Gerwels).

3. Why are control charts developed using sample means? (See Chapter 3 Part II).

4. Why do we need both X-bar and R control charts? (See Chapter 3 Part II).

5. Does an observation (i.e., sample mean) plotted outside the control limits necessarily indicate a special cause? Explain. (See Figure 3-11 for an example). Do observations plotted inside the control limits necessarily indicate a common cause? (See Francis & Gerwels and Walter, Higgins & Roth).

6. How do confidence intervals developed around a regression line differ from the upper and lower limits of a control chart?

7. Discuss the two types or errors connected with the use of control charts. What type do you think managers tend to make more often? Why? (See Chapter 3 Part II and Deming Chapter 8).

8. To say that a system is stable means that the performance of the system is predictable within a specified range. Explain this statement. (See Figure 3-11 for an example and the Dog in the Yard illustration).

9. Does a stable system mean that the system is efficient? Explain. (See Chapter 3 Part II).

10. How can control charts be used to promote continuous improvement of a system? (See Chapter 3 Part II, Reeve & Philpot and Francis & Gerwels summaries).

11. Think of some practical applications of the control chart you could use to monitor your health, the performance of your car, or the performance of some other system you come in contact with in your daily life. (See the Walter, Higgins & Roth summary).

12. Is the control chart methodology a top down or a bottom up approach? Explain. (See Chapter 3 Part II).

13. Does the traditional standard cost system recognize the concept of variability that is the basis of the statistical process control methodology? Explain. (See the Roehm, Weinstein & Castellano, Reeve & Philpot, Francis & Gerwels and Reeve 89 summaries).

14. What is required for control?

15. Compare the SPC control concept with the accounting standard cost control concept. (See the Roehm, Weinstein & Castellano, Reeve & Philpot, Francis & Gerwels and Reeve 89 summaries).

16. Is the variation within the upper and lower limits of a control chart considered to be controllable or uncontrollable? Explain. (See the Dog in the Yard illustration).

17. Is the variation within the upper and lower limits of a control chart considered to be in control or out of control? Explain. (See the Dog in the Yard illustration).

18. Is the variation within the upper and lower limits of a control chart considered to be predictable or unpredictable? Explain. (See the Dog in the Yard illustration).

19. Is the variation outside the limits of a control chart considered to be controllable or uncontrollable? Explain. (See the Dog in the Yard illustration).

20. Is the variation outside the limits of a control chart considered to be in control or out of control? Explain. (See the Dog in the Yard illustration).

21. Is the variation outside the limits of a control chart considered to be predictable or unpredictable? Explain. (See the Dog in the Yard illustration).

22. GE's Jack Welch developed a program at General Electric referred to as Six Sigma. What is a sigma and what does six sigma mean? (See the Six Sigma summary, the Lucier & Seshadri summary and GE's Six Sigma site).

23. How does GE's Six Sigma program different from the SPC concept? (See the Lucier & Seshadri summary and GE's Six Sigma site).

24. What was the main idea or purpose of GE's "Work-Outâ„¢" program started by Jack Welch ? (See the Lucier & Seshadri summary).

25. The SPC concept is a prerequisite for understanding Deming's Theory of Profound Knowledge. Explain. (See the Deming category to begin).