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Production planning is the planning of production and manufacturing modules in a company or industry.

It utilizes the resource allocation of activities of employees, materials and production capacity, in order to

serve different customers.

The administrative process that takes place within a manufacturing business and which involves making

sure that sufficient raw materials, staff and other necessary items are procured and ready to create finished

products according to the schedule specified.

Production Planning is concerned with the determination, acquisition and arrangement of all facilities

necessary for future operations.

Short-range (to mid-range) forecasts are typically for daily, weekly, or monthly sales demand

for up to approximately two years into the future, depending on the company and the type of industry.

They are primarily used to determine production and delivery schedules and to establish inventory levels.

Long-range forecast is usually for a period longer than two years into the future. A long-range

forecast is normally used for strategic planning--to establish long-term goals, plan new products for

changing markets, enter new markets, develop new facilities, develop technology, design the supply

chain, and implement strategic programs such as TQM.

Demand Behavior; Demand sometimes behaves in a random, irregular way. Three types of

demand behavior are trends, cycles, and seasonal patterns. Trend is a gradual, long-term up or down

movement of demand. Random variations are movements that are not predictable and follow no pattern

(and thus are virtually unpredictable). Cycle is an up-and-down movement in demand that repeats itself

over a lengthy time span (i.e., more than a year). Seasonal pattern is an oscillating movement in demand

that occurs periodically (in the short run) and is repetitive. Seasonality is often weather related.

Sales personnel are closest to the customers and have an intimate feel of the market. Thus they are most

suited to assess consumer’s reaction to company's products. Here each salesperson makes an estimate of

the expected sales in their area, territory, state and/or region, These estimates are collated, reviewed and

revised. Taking in to account product design, features and price is decided and made. Thus, "collective

opinion survey forms the basis of market Analysis and demand forecasting.

Although this method is simple, direct, first hand and most acceptable, it suffers from following

weaknesses:

demand estimates by individual salespersons to obtain total demand of the country may be risky

as each person has knowledge about a small portion of market only

Salesperson may not prepare the demand estimation with the seriousness and care

limited experience in their employment, salesperson may not have the required knowledge and

experience

Delphi Method

A procedure for acquiring informed judgments and opinions from knowledgeable individuals using a

series of questionnaires to develop a consensus forecast about what will occur in the future.

The Delphi technique was developed at RAND Corporation in the 1950s. Delphi method is a group

(members) process and aims at achieving a `single opinion of the members on the subject. Herein experts

in the field of marketing research and demand forecasting are engaged in

carrying out sample surveys of market

conducting opinion polls

1. Administrator sends out a set of questions in writing to all the experts on the panel, who are

requested to write back a brief predication.

2. Written predictions of experts are collected and combined, edited and summarized together by the

administrator.

3. Based on the summary, administrator designs a new set of questions and gives them to the same

experts who answer back again in writing.

4. Administrator repeats the process of collecting, combining, editing and summarizing the

responses.

5. Steps 3 and 4 are repeated by the administrator to experts with diverse backgrounds until they

come to one single opinion.

If there is divergence of opinions and hence conclusions, administrator has to sort it out through mutual

discussions. Administrator has to have the necessary experience and background as he plays a key role in

designing structured 'questionnaires and synthesizing the data.

Economic Indicators

An economic indicator is a statistic about an economic activity. Economic indicators allow analysis of

economic performance and predictions of future performance. One application of economic indicators is

the study of business cycles.

This method has its base for demand forecasting on few economic indicators.

For demand towards building materials sanctioned for Cement.

Towards demand of consumer goods.

(c) Agricultural Income:

Towards demand of agricultural imports instruments, fertilisers, manner etc.

Towards demand of car parts and petrol.

These and other economic indicators are given by specialized organization. The analyst should establish

relationship between the sale of the product and the economic indicators to project the correct sales and to

measure as to what extent these indicators affect the sales. To establish relationship is not an easy task

especially in case of New Product where there are no past records.

(a) If there is any relationship between the demand for a product and certain economic indicator.

(b) Make the relationship by the method of least squares and derive the regression equation. Supposing

the relationship is Linear the equation will be of the form y = α + bx. There can be curvilinear relationship

also.

(c) Once the regression equation is obtained any value of X (economic indicator) can be applied to

forecast the value of Y (demand).

(d) Past relationship may not recur. Therefore, need for value judgments are felt. Other new factors may

also have to be taken into consideration.

(2) For few products it is not good, as no past data are available.

(3) This method of forecasting is best suited where relationship of demand with a particular indicator is

characterized by a Time Lag, such as construction contracts will give consequence to demand for building

materials with some amount of Time Lag.

But where the demand does not Lag behind the particular economic index, the utility is restricted because

forecast may have to be based on projected economic index itself that may not result true.

Regression is used for forecasting by establishing a mathematical relationship between two or more

variables. We are interested in identifying relationships between variables and demand. If we know that

something has caused demand to behave in a certain way in the past, we would like to identify that

relationship so if the same thing happens again in the future, we can predict what demand will be.

Linear regression is a mathematical technique that relates one variable, called an independent

variable, to another, the dependent variable, in the form of an equation for a straight line. A linear

equation has the following general form:

Because we want to use linear regression as a forecasting model for demand, the dependent

variable, y, represents demand, and x is an independent variable that causes demand to behave in a linear

manner.

To develop the linear equation, the slope, b, and the intercept, a must first be computed using the

following least squares formulas:

The State University athletic department wants to develop its budget for the coming year using a forecast

for football attendance. Football attendance accounts for the largest portion of its revenues, and the

athletic director believes attendance is directly related to the number of wins by the team. The business

manager has accumulated total annual attendance figures for the past eight years:

Given the number of returning starters and the strength of the schedule, the athletic director believes the

team will win at least seven games next year. Develop a simple regression equation for this data to

forecast attendance for this level of success.

SOLUTION:

The computations necessary to compute a and b using the least squares formulas are summarized in the

accompanying table. (Note that y is given in 1,000s to make manual computation easier.)

Substituting these values for a and b into the linear equation line, we have

The data points with the regression line are shown in the figure. Observing the regression line relative to

the data points, it would appear that the data follow a distinct upward linear trend, which would indicate

that the forecast should be relatively accurate. In fact, the MAD value for this forecasting model is 1.41,

which suggests an accurate forecast.

Multiple Regression

Another causal method of forecasting is multiple regression, a more powerful extension of linear

regression. Linear regression relates demand to one other independent variable, whereas multiple

regression reflects the relationship between a dependent variable and two or more independent variables.

A multiple regression model has the following general form:

For example, the demand for new housing (y) in a region might be a function of several independent

variables, including interest rates, population, housing prices, and personal income. Development and

computation of the multiple regression equation, including the compilation of data, is more complex than

linear regression. The only means for forecasting using multiple regression is with a computer.

To demonstrate the capability to solve multiple regression problems with Excel spreadsheets we will

expand our State University athletic department example for forecasting attendance at football games that

we used to demonstrate linear regression. Instead of attempting to predict attendance based on only one

variable, wins, we will include a second variable for advertising and promotional expenditures as follows:

We will use the "Data Analysis" option (add-in) from the Tools menu at the top of the spreadsheet that we

used in the previous section to develop our linear regression equation, and then the "Regression" option

from the "Data Analysis" menu. The resulting spreadsheet with the multiple regression statistics is shown

inExhibit 10.12

Note that the data must be set up on the spreadsheet so that the two x variables are in adjacent columns (in

this case A and B). Then we enter the "Input X Range" as A4:B12 as shown in Exhibit 10.13.

The regression coefficients for our x variables, wins and promotion, are shown in cells B27 and B28.

Thus the multiple regression equation is formulated as

This equation can now be used to forecast attendance based on both projected football wins and

promotional expenditure. For example, if the athletic department expects the team to win seven games

and plans to spend $60,000 on promotion and advertising, the forecasted attendance is

If the promotional expenditure is held constant, every win will increase attendance by 3,560.99, whereas

if the wins are held constant, every $1,000 of advertising spent will increase attendance by 36.8 fans. This

would seem to suggest that the number of wins has a more significant impact on attendance than

promotional expenditures.

r2, the coefficient of determination, shown in cell B19 is .900, which suggests that 90% of the amount of

variation in attendance can be attributed to the number of wins and the promotional expenditures.

However, as we have already noted, the number of wins would appear to probably account for a larger

part of the variation in attendance.

Coefficient of Correlation

Correlation in a linear regression equation is a measure of the strength of the relationship between the

independent and dependent variables. The formula for the correlation coefficient is

The value of r varies between -1.00 and +1.00, with a value of +1.00 indicating a strong linear

relationship between the variables. If r = 1.00, then an increase in the independent variable will result in a

corresponding linear increase in the dependent variable. If r = -1.00, an increase in the dependent variable

will result in a linear decrease in the dependent variable. A value of r near zero implies that there is little

or no linear relationship between variables.

We can determine the correlation coefficient for the linear regression equation determined in Example

10.9 by substituting most of the terms calculated for the least squares formula (except for y2) into the

formula for r:

This value for the correlation coefficient is very close to 1.00, indicating a strong linear relationship

between the number of wins and home attendance.

Another measure of the strength of the relationship between the variables in a linear regression equation is

the coefficient of determination. It is computed by squaring the value of r. It indicates the percentage of

the variation in the dependent variable that is a result of the behavior of the independent variable. For our

example, r = 0.947; thus, the coefficient of determination is

This value for the coefficient of determination means that 89.7 percent of the amount of variation in

attendance can be attributed to the number of wins by the team (with the remaining 10.3 percent due to

other unexplained factors, such as weather, a good or poor start, or publicity). A value of 1.00 (or 100

percent) would indicate that attendance depends totally on wins. However, since 10.3 percent of the

variation is a result of other factors, some amount of forecast error can be expected.

Time Series Analysis comprises methods for analyzing time series data in order to extract meaningful

statistics and other characteristics of the data.

Time series methods are statistical techniques that use historical demand data to predict future demand.

Regression (or causal) forecasting methods attempt to develop a mathematical relationship (in the form of

a regression model) between demand and factors that cause it to behave the way it does.

Curvilinear Relationships ?

Exponential Smoothing

Part of many forecasting packages; ideal for developing forecasts of lots of smaller items

At-1 = Actual demand for the period

a = Weight between 0 and 1

Formula

As a gets closer to 1, the more weight put on the most recent demand number

Revision of Forecasts?

CRP is the process of determining what personnel and equipment (Times) are needed to meet the

production objectives embodied in the master schedule and the material requirements plan.

MRP focuses upon the priorities of materials while CRP focuses primarily upon time.

Factors of production is an economic term that describes the inputs that are used in the production of

goods or services in order to make an economic profit. The factors of production include land, labor,

capital and entrepreneurship.

Determination of Component-part Requirements

Dependent demand items are components of finished goods—such as raw materials, component parts,

and subassemblies—for which the amount of inventory needed depends on the level of production of the

final product. For example, in a plant that manufactured bicycles, dependent demand inventory items

might include aluminum, tires, seats, and bike chains.

Bill of Materials is a listing of all components (subassemblies and materials) that go into an assembled

item. It frequently includes the parts number and quantity required per assembly.

Learning Curves A learning curve is a graphical representation of how an increase in learning (measured

on the vertical axis) comes from greater experience (the horizontal axis); or how the more someone (or

thing) does something, the better they get at it.

Learning curves graphically portray the costs and benefits of experience when performing routine or

repetitive tasks. Also known as experience curves, cost curves, efficiency curves, and productivity curves,

they illustrate how the cost per unit of output decreases over time as the result of accumulated workforce

learning and experience. That is, as cumulative output increases, learning and experience cause the cost

per unit to decrease. Experience and learning curves are used by businesses in production planning, cost

forecasting, and setting delivery schedules, among other applications.

Waiting lines form because people or things arrive at the servicing function, or server, faster than they can

be served. This does not mean that the service operation is understaffed or does not have the capacity to

handle the influx of customers. Most businesses and organizations have sufficient serving capacity

available to handle its customers in the long run. Waiting lines result because customers do not arrive at a

constant, evenly paced rate, nor are they all served in an equal amount of time. Customers arrive at

random times, and the time required to serve each individually is not the same. A waiting line is

continually increasing and decreasing in length (and is sometimes empty) and in the long run approaches

an average rate of customer arrivals and an average time to serve the customer.

Queueing theory is the mathematical study of waiting lines, or queues. A queueing model is constructed

so that queue lengths and waiting time can be predicted

The Poisson distribution is a discrete probability distribution for the counts of events that occur

randomly in a given interval of time (or space). If we let X = The number of events in a given interval,

Then, if the mean number of events per interval is λ The probability of observing x events in a given

interval is given by P(X = x) = e −λ λ x x! x = 0, 1, 2, 3, 4, . . . Note e is a mathematical constant. e ≈

2.718282. There should be a button on your calculator e x that calculates powers of e. If the

probabilities of X are distributed in this way, we write X∼Po(λ) λ is the parameter of the distribution. We

say X follows a Poisson distribution with parameter λ Note A Poisson random variable can take on any

positive integer value. In contrast, the Binomial distribution always has a finite upper limit

Monte Carlo simulations are used to model the probability of different outcomes in a process that cannot

easily be predicted due to the intervention of random variables. It is a technique used to understand the

impact of risk and uncertainty in prediction and forecasting models.

to assist production managers in scheduling and placing orders for items of dependent demand.

Break-even chart is a graphical representation of costs at various levels of activity shown on the same

chart as the variation of income (or ... of investment in production capacity (e.g. adding a new factory

unit) or through the growth in overheads required to support a larger, more complex business.

Inventory management is the management of inventory and stock. As an element of supply chain

management, inventory management includes aspects such as controlling and overseeing ordering

inventory, storage of inventory, and controlling the amount of product for sale.

Inventory control, also known as stock control, involves regulating and maximising your company's

inventory. The goal of inventory control is to maximise profits with minimum inventory investment,

without impacting customer satisfaction levels.

company's inventories; purchasing, shipping, receiving, tracking, warehousing and storage,

turnover, and reordering.

ABC Analysis

This analysis categorizes items based on their annual consumption value, sometimes Inventory Managers can

use Pareto’s Principle for classification.

Pareto’s Principle classifies the important items in a certain group that usually constitute a small portion of the

total items in the group. The majority of the items, as a whole, will seem to be of minor significance.

- CLASS A: 10% of total inventories contributing towards 70% of total consumption value.

- CLASS B: 20% of total inventories, which account for about 20% of total consumption value.

- CLASS C: 70% of total inventories, which account for only 10% of total consumption value.

FSN Analysis

This analysis classifies inventory based on quantity, rate of consumption and frequency of issues and uses.

Here is the basic depiction of FSN Analysis:

F stands for Fast moving, S for Slow moving and N for Nonmoving items.

- Slow Moving (S) = Items that are issued/used less for certain period of time

- Non-Moving (N) = Items that are not issued/used for more than certain duration

VED Analysis

This is an analysis whose classification is dependent on the user’s experience and perception. This analysis

classifies inventory according to the relative importance of certain items to other items, like in spare parts.

In VED Analysis, the items are classified into three categories which are:

- Essential – keeping a minimum stock of this inventory is enough.

- Desirable – operations can run with or without this, optional.

HML Analysis

HML Analysis classifies inventory based on how much a product costs/its unit price. The classification is as

follows:

- Medium Cost (M) = Item with a medium unit value.

- Low Cost (L) = Item with a low unit value.

SDE Analysis

This analysis classifies inventory based on how freely available an item or scarce an item is, or the length of its

lead time. This is how the inventory is classified:

- Scarce (S) = Items which are imported and require longer lead time.

- Difficult (D) = Items which require more than a fortnight to be available, but less than 6 months’ lead

time.

- Easily available (E) = Items which are easily available

A fixed order quantity system is the arrangement in which the inventory level is continuously

monitored and replenishment stock is ordered in previously-fixed quantities whenever at-hand

stock falls to the established re-order point. In other words it is an Inventory Control Systems.

Inventory control system where stock level is reviewed regularly at fixed intervals(not

continuously), and whenever it falls below a certain level, an order to replenish it to the required

level is placed.

Quantity Discounts

A quantity discount is an incentive offered to a buyer that results in a decreased cost per unit

of goods or materials when purchased in greater numbers. A quantity discount is often offered

by sellers to entice buyers to purchase in largerquantities.

Service Levels represents the expected probability of not hitting a stock-out. This percentage is required

to compute the safety stock. Intuitively, the service level represents a trade-off between the cost of

inventory and the cost of stock-outs (which incur missed sales, lost opportunities and client frustration

among others). In this article, we detail how to optimize the service level value. Then, the analysis is

refined for the special case of perishable food.

Profit and Cost Comparison under Risk or Expected Net Profit Value

Expected value is defined as the difference between expected profits and expected costs. Expected profit

is the probability of receiving a certain profit times the profit, and expected cost is the probability that a

certain cost will be incurred times the cost.

Functions of Inventory

2. Effective Running of Stores

3. Technological Responsibility for the State of Different Materials

4. Stock Control System

5. To Ensure the Timely Availability

Economic Ordering Quantity, Safety Stock Analysis, Fill Rates, and Cycle Service Levels.

In brief, the deterministic models are built on the assumption that there is no uncertainty associated with

demand and replenishment of inventories. On the contrary, the probabilistic models take cognizance of

the fact that there is always some degree of uncertainty associated with the demand pattern and lead time

of inventories

Just-in-time (JIT) inventory management, also know as lean manufacturing and sometimes referred to as

the Toyota production system (TPS), is the process of ordering and receiving inventory for production

and customer sales only as it is needed and not before. This means that the company does not hold safety

stock and operates with low inventory levels. This strategy helps companies lower their inventory

carrying costs by increasing efficiency and decreasing waste.

JIT Layout

JIT in Services

Supply Chain Management the management of the flow of goods and services, involves the movement

and storage of raw materials, of work-in-process inventory, and of finished goods from point of origin to

point of consumption.

Supply Chain Strategies defines the connection and combination of activities and functions throughout the value

chain, in order to fulfill the business value proposal to customers in a marketplace.

Four main elements, the industry framework (the marketplace); the organization's unique value proposal

(its competitive positioning); its internal processes (supply chain processes); and its managerial focus (the

linkage among supply chain processes and business strategy).

Vendor Selection Selecting an ideal vendor is one of the most important decisions a business can make.

It is not as simple as choosing a vendor who is nearby or is providing services at a low cost, since the

ideal vendor should meet all the vendor selection criteria and methods.

the supply/valuechain, including methods to improve how organizations find the materials and

services needed to make a product or service and deliver it to customers.

Managing the Supply Chain

Supply chain management (SCM) is the active streamlining of a business' supply-side activities to

maximize customer value and gain a competitive advantage in the marketplace. SCM represents an effort

by suppliers to develop and implement supply chains that are as efficient and economical as possible.

Work Scheduling Scheduling involves taking decisions regarding the allocation of available capacity or

resources (equipment, labor and space) to jobs, activities, tasks or customers over time. Scheduling thus

results in a time-phased plan, or schedule of activities. The schedule indicates what is to be done, when,

by whom and with what equipment. Scheduling seeks to achieve several conflicting objectives: high

efficiency, low inventories and good customer service. Scheduling can be classified by the type of

process: line, batch and project.

Dispatching

Gantt chart is a common and very useful technique to monitor the progress of a project. ...Gantt

charts are not only a useful tool in the field of project management but also in every field where

processes have be monitored because Gantt charts are a very vivid way of structuring sequence

depended activities.

Work measurement is the application of techniques designed to establish the time for

an average worker to carry out a specified manufacturing task at a defined level of

performance.

Standard Time is the total time a job should be completed, Actual time (observed time)

Methods of Timing

Performance rating is the step in the work measurement in which the analyst observes the worker's

performance and records a value representing that performance relative to the analyst's concept of

standard performance.[1]

Performance rating helps people do their jobs better, identifies training and education needs,

assigns people to work they can excel in, and maintains fairness in salaries, benefits, promotion,

hiring, and firing. Most workers want to know how they are doing on the job. Workers need

performance feedback to work effectively. Accessing an employee timely, accurate, constructive

feedback is key to effective performance.[2] Motivational strategies such as goal setting depend upon

regular performance updates. While there are many sources of error with performance ratings, error

can be reduced through rater training and through the use of behaviorally anchored rating scales.

In industrial and organizational psychology such scales are used to clearly define the behaviors that

constitute poor, average, and superior performance.

Allowance Factor and Production Studies

Standard time is the total time in which a job should be completed at standard performance i.e. work

content, contingency allowance for delay, unoccupied time and interference allowance, where applicable.

Standard Time Data is a compilation of standard time value for each element of a task, used as a basis

for establishing standard time for similar tasks without making actual time studies.

You can measure employee productivity with the laborproductivity equation: total output /

total input. Let's say your company generated $80,000 worth of goods or services (output)

utilizing 1,500 labor hours (input). Tocalculate your company's labor productivity, you would

divide 80,000 by 1,500, which equals

Managing Quality

Quality refers to the ability of product or service to consistently meet or exceed customer expectations.

Quality means getting what you pay for.

International quality standards are criteria or rules set up by organizations that help determine

compliance across national borders.

Total Quality Management (TQM) and its Tools Total quality management can be summarized as a

management system for a customer-focused organization that involves all employees in continual

improvement. It uses strategy, data, and effective communications to integrate the quality discipline

into the culture and activities of the organization. Many of these concepts are present in

modern Quality Management Systems, the successor to TQM.

1. Customer-focused

The customer ultimately determines the level of quality. No matter what an organization does to foster

quality improvement—training employees, integrating quality into the design process, upgrading

computers or software, or buying new measuring tools—the customer determines whether the efforts

were worthwhile.

All employees participate in working toward common goals. Total employee commitment can only be

obtained after fear has been driven from the workplace, when empowerment has occurred, and

management has provided the proper environment. High-performance work systems integrate continuous

improvement efforts with normal business operations. Self-managed work teams are one form of

empowerment.

3. Process-centered

A fundamental part of TQM is a focus on process thinking. A process is a series of steps that take inputs

from suppliers (internal or external) and transforms them into outputs that are delivered to customers

(again, either internal or external). The steps required to carry out the process are defined, and

performance measures are continuously monitored in order to detect unexpected variation.

4. Integrated system

Although an organization may consist of many different functional specialties often organized into

vertically structured departments, it is the horizontal processes interconnecting these functions that are the

focus of TQM.

Micro-processes add up to larger processes, and all processes aggregate into the business

processes required for defining and implementing strategy. Everyone must understand the vision,

mission, and guiding principles as well as the quality policies, objectives, and critical processes of

the organization. Business performance must be monitored and communicated continuously.

An integrated business system may be modeled after the Baldrige National Quality

Program criteria and/or incorporate the ISO 9000 standards. Every organization has a unique

work culture, and it is virtually impossible to achieve excellence in its products and services

unless a good quality culture has been fostered. Thus, an integrated system connects business

improvement elements in an attempt to continually improve and exceed the expectations of

customers, employees, and other stakeholders.

A critical part of the management of quality is the strategic and systematic approach to achieving an

organization’s vision, mission, and goals. This process, called strategic planning or strategic management,

includes the formulation of a strategic plan that integrates quality as a core component.

6. Continual improvement

A major thrust of TQM is continual process improvement. Continual improvement drives an organization

to be both analytical and creative in finding ways to become more competitive and more effective at

meeting stakeholder expectations.

In order to know how well an organization is performing, data on performance measures are necessary.

TQM requires that an organization continually collect and analyze data in order to improve decision

making accuracy, achieve consensus, and allow prediction based on past history.

8. Communications

During times of organizational change, as well as part of day-to-day operation, effective communications

plays a large part in maintaining morale and in motivating employees at all levels. Communications

involve strategies, method, and timeliness.

Role of Inspection

Inspection and testing measure and determine the quality level of the products.

Inspection is an activity which generally occurs outside a laboratory, often at the place where the product

is being produced. Inspection is primarily focused on the appearance, construction, and basic function of

the product. It is the quality control function which is carried out, during the manufacturing of the product

by an authorized inspector. The function includes measuring, examining, testing, gauging or otherwise

comparing the findings with applicable requirements. The authorized inspector is an employee who is

properly qualified and has the authority to carry out the inspection.

TQM in Services

Total Quality Management is the key mantra for the manufacturing industry, but its benefits have been

better realized by intense customer- oriented service industries — be it fast moving consumer goods

(FMCG), retail, hospitality, telecom or banking. In service organisations, the TQM challenge lies in

establishing smooth connectivity between business processes so as to retain the customer. A quality

control approach to cover all processes would be beneficial to every Organisation.. Since in a service

industry every aspect of quality is associated with every employee, quality Control department has a key

and a very important role to play. Putting in place an effective TQM mechanism in a service industry

requires patience and commitment on the part of the management and the workforce to satisfy the

customer.

CONTROL CHART A statistical tool to study the variation in the process over time. A control chart

always has a • central line for the average, • an upper line for the upper control limit and • a lower line for

the lower control limit. • These lines are determined from historical data. CONTROL CHART Purpose: •

Analyze the past data and determine the performance of the process • Measure control of the process

against standards

Defective

A unit that fails to meet acceptance criteria due to one or more defects. Defective data is used when a quality

characteristic of an item cannot be easily measured, but can be classified as conforming or non-conforming. It

involves the fraction, or percent of defectives in a sample, and are represented in either an np chart or an n chart.

Defect

A failure to meet one part of an acceptance criteria. Defect data is used when the quality of the item can be

determined by the number of defects in the item or by counting the number of occurrences of some event per unit of

time. The data can be shown in either the c chart or the u chart.

Statistical Process Control(SPC) Quality control is concerned with the quality of conformance of a

process. Managers use statistical process control to evaluate the output of a process to determine its

acceptability. They take periodic samples from the process and compare them with a predetermined

standard. If the sample results are not acceptable, they stop the process and take corrective action. If the

sample results are acceptable, they allow the process to continue.

production lot of material. It has been a common quality control technique used in industry. It is

usually done as products leaves the factory, or in some cases even within the factory.

Quality assurance programs have one major focus, assuring that an organization is adhering

to standards. Knowing how to build a quality assurance program is important as it is

continuous and systematically evaluates the adequacy and appropriateness of your company's

products and services.

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