Control Charts

Control Charts are used for monitoring, analyzing and predicting process performances and identifying
alternatives for process improvement. Control charts are easy to understand and easy to use quality
management tools and is excellent communication tool as well.

Control charts show whether the process is in control which means whether the process output is within
controllable range.

In other words by using control charts we are tracking whether the process is statistically in control or
statistically out of control.

There are different types of control charts. Such as:

Variables Control Charts - used for quantitative measurements, for example, height, weight.
Attributes control charts - used for qualitative measurements, for example, accept/reject.
Univariate control chart, ( is a graphical chart of one quality characteristic)
Multivariate control chart, (is a graphical chart of more than one quality characteristic)

A control chart is a two-dimensional. The horizontal dimension represents time.

The vertical dimension represents the value of the sample statistic, (which might be the sample mean,
range, or standard deviation).

Strategies for dealing with out-of-control findings

If a data point falls outside the control limits, we assume that the process is probably out of control and
that an investigation is warranted to find and eliminate the cause or causes.

The main benefit of control charts is to provide a visual means to identify conditions where the process
level or variation has changed due to an assignable cause and consequently is no longer in a state of
statistical control.
The principle of operation of control charts is rather simple and consists of five general steps:

1. Samples are drawn from the process output at regular intervals.

2. A statistic is calculated from the observed values.

3. The value of the statistic is charted over time; any points falling outside the control limits
indicate that there has been a change in the process, either its setting or its variability.

4. If such change is detected, the process is stopped and an investigation is conducted to

determine the causes for the change.

5. Once the causes of the change have been ascertained and any required corrective action
has been taken, the process is resumed.

Control chart, showing changes in average of process.

TYPES OF CONTROL CHARTS

There are main two types of Control Chart.

·         Variables Control Charts - used for quantitative measurements, for example, height, weight.

·         Attributes control charts - used for qualitative measurements, for example, accept/reject.

Variables control Charts

The classical type of control chart, originally developed back in the 1930's. In this case data are collected
periodically and plotting it versus time. If more than one data value is collected at the same time, statistics
such as the mean, range, median, or standard deviation are plotted. Variables charts are useful for
measuring and predicting when the tool needs changing before it creates defective products. Variables
charts are more sensitive to change than Attributes charts, but can be more difficult both in the
identification of what to measure and also in the actual measurement. There are different types of Control
Chart that you can use ( X-bar/R and X-bar/S). Variables charts are used for more detailed analysis.
Types of variable Control Charts are:

X-bar/R chart: for small sample group.

X-bar/S chart: for large sample group

Attribute Control Chart

Attribute Control Chart is needed for counting the number of defects per item or total defects.
There are four types of attribute chart to choose from (u, c, p and np). Types of Attributes Control
Charts are:
 
· np Chart - for measurements such as number of parts defective.
 
· p Chart - for percentage measurements, such as percentage of parts defective.
 
· c Chart - for measuring defects in units of constant size.
 
· u Chart - for measuring defects in units of varying size.

Attribute charts are useful for both machine and people-based processes. Data for them is often readily
available and they are easily understood.

WHAT IS GRN ?

At the time of delivery from the supplier to the person who orders the goods, the person will check the
quantity as well as quality. He will ensure the ordered quantities are received without any damage.
The store keeper will put the GRN only those goods which were received at his counter. Then the stores
ledger will be Debited with GRN with concerned material code and credited when it is given for
consumption.
 ADVANTAGE : Helps in proper stores accounting

STOCK VALUATION METHODS

Stocks have main two types of valuations.

First, the fundamental valuation. This is the valuation that people use to justify stock prices. The most
common example of this type of valuation methodology is P/E ratio, which stands for Price to Earnings
Ratio.
The other way stocks are valued is based on supply and demand. The more people that want to buy the
stock, the higher its price will be. And conversely, the more people that want to sell the stock, the lower
the price will be.

There are many different ways to value stocks. Some of them are:

Earnings Per Share (EPS). EPS is the total net income of the company divided by the number of shares
outstanding.  It sounds simple but unfortunately it gets quite a bit more complicated. 

Price to Earnings (P/E).  Historical P/Es are computed by taking the current price divided by the sum of
the EPS for the previous year. P/Es are probably the most important valuation method because they
reflect the future growth of the company . The P/E of one company can be compared to that of its
competitors.  It is important to remember that P/Es change constantly. 

Growth Rate. By this method, anyone can predict the future growth after analyzing the historical growth
rate of both sales and income. However, companies & economy are constantly changing, so don't rely on
historical growth rates to predict the future, but instead use them as a guideline.

PEG Ratio.  This valuation technique has really become popular over the past decade.  It takes three
factors into account; the price, earnings, and earnings growth rates. 

Return on Assets (ROA).  ROA, expressed as a percent, measures the company's ability to make money
from its assets. 

Price to Sales (P/S).  This figure is useful because it compares the current stock price to the annual sales.

Market Capital. Market Capital is the value of all of the company's stock.