In designing control charts,companies usually use ______.
A)two standard deviations because narrower control limits may a lead a manager to erroneously conclude that the process is out of control when in fact the variation that led to the points falling out of the control limits was purely random
B)two standard deviations because broader control limits may a lead a manager to erroneously conclude that the process is out of control when in fact the variation that led to the points falling out of the control limits was purely random
C)three standard deviations because narrower control limits may a lead a manager to erroneously conclude that the process is out of control when in fact the variation that led to the points falling out of the control limits was purely random
D)three standard deviations because broader control limits may a lead a manager to erroneously conclude that the process is out of control when in fact the variation that led to the points falling out of the control limits was purely random

Question

Quizplus · Accepted Answer

In designing control charts, companies usually use three standard deviations because using narrower control limits may lead a manager to erroneously conclude that the process is out of control when in fact the variation that led to the points falling out of the control limits was purely random. This is known as a Type I error. On the other hand, broader control limits may not provide enough sensitivity to detect potential problems in the process, resulting in a Type II error. Therefore, a balance needs to be struck between the two, and three standard deviations provide a good compromise between sensitivity and specificity in detecting changes in the process.

In Designing Control Charts,companies Usually Use ______