Cost Management: A Strategic Emphasis 5th Edition by David Stout, Edward Blocher, Gary Cokins

Exercise 36

Using Run Charts to Examine Process Stability All processes illustrate some variation (in quality, conformance to specification, etc.). One hallmark of a quality process is stability. As noted in the text, both control charts and run charts (as well as histograms) can be used to examine process stability. In this exercise you are provided with some information regarding loan processing times at a bank (for an individual loan officer) over a 20-day period. In sequential order, these data are as follows: 90, 73, 62, 88, 47, 68, 87, 68, 50, 69, 26, 78, 80, 30, 32, 73, 60, 50, 36, and 89.

Required

1. Use Excel to plot the above data, in time-series fashion.

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2. What is meant by the term process stability?

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3. What techniques might you use to support a conclusion as to whether or not this process is stable?

Step 1 of 4

Management and Control of Quality

Quality is explained as a term associated with customer satisfaction. It is the total level of satisfaction any customer gets from any organization’s products or service. There are two components of quality- Design Quality and Performance Quality. There are various approaches to setting quality related expectations and among those alternatives one is the Cost of Quality (COQ) Reporting. It provides relevant cost and revenue data used for decision-making purposes.