# three standard deviation distance right B u s i n e s s F i n a n c e

three standard deviation distance right B u s i n e s s F i n a n c e

1.Briefly discuss the differences between the following pairs. Mainly tell me 1) what these are and 2) what are these for.

a.Three standard deviation distance right to the process mean and three standard deviation distance left to the process mean

b.Upper specification limits and lower specification limits

c.Upper control limits and lower control limits

d.Please draw the following scenarios in the space below: μ = 45, σ = 2, n = 4, control distance = 3σ, specification limits = [40, 50]

i.In your drawing, please clearly indicate the control limits and specification limits

• A firm processes bills for customers. Lately, they have been getting complaints of errors in the bills they have processed. Bills can contain errors due to a number of causes, such as incorrect amounts, wrong dates, wrong customer information, etc. The quality manager for the firm decides to measure and eventually improve the errors by implementing statistical process control. (Data in Table 1)
• If we are to plot error per bill (or error rate) each day, which type of control chart should be used? (base size of the opportunity is the daily bills)
• If we are to plot bills per error (the number of bills it needs to generate one error), which type of control chart should be used? (base size of the opportunity is each error)
• Use Excel, please set up and plot the control chart on “bills per error”. If you have spotted a special cause variation in the setup, please eliminate the observation and reconstruct the control chart. Please paste the control charts for both before the adjustment of special cause variations and after the adjustment. Please paste as pictures.
• Table 2 data shows a new data after an internal meeting is held and the review process is improved. Use the control chart to evaluate sample ID 21 to 30 to see if there is any (positive or negative) change to the process.
• Based on the newest data, do you think the center line, upper control limit, and lower control limit need to be adjusted? Discuss.

(Instruction for Excel: When plot the control chart, please use different colors to plot sample ID 1-20 and 21-30. You can do that by simply using different columns for each group. Copy and paste the control chart as picture here in the Word file. Please also submit the Excel file for reference. I need to save the printer ink, so do not use darker canvas color for Excel chart.)