When using the statistical control chart to investigate variances:
A) Managers should only investigate variances that are beyond the critical value
B) Managers should only investigate variances that are fall below the critical value over a number of consecutive periods
C) Any variances that go beyond the critical values are likely to be the result of random events such as employee illness
D) Managers should estimate the critical values by averaging the variances over a number of periods

Question

Quizplus · Accepted Answer

The statistical control chart is used to identify variances that are beyond the normal range of variation. These variances are called "out-of-control" points and indicate a possible problem that needs to be investigated. Therefore, managers should only investigate variances that are beyond the critical value.

When Using the Statistical Control Chart to Investigate Variances