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What is a Value Chain

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Define process variation/ What types of variation exists in organizations today and what are some ways to identify and deal with the variation?

What is a Value Chain? What properties distinguish a strong value chain from a weak value chain?

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Hi there,

Here are your answers:

Natural process varation, sometimes just called process variation, is the phenomenon that describes natural fluctuations in process-outputs.

For example:

A filling station is set to fill bottles with 1 litre (assume σ =.1) of liquid. Suppose that we took various (independent) samples (at different times). We would see that the average filling of the bottles would be 1 litre. But if we look to the samples individually, we would discover that the values (slightly, depending on the standard deviation of the process) differ. So 10 samples would give values like:

1.1, 0.95, 1.05, 1.01, 0.99, 0.9, 0.97, 1.03, 1.0, 0.99

When a sample average(size n=10 in this case) is located outside the control limits, then this is an indication that the process is out of (statistical) control. To be more specifically:

The Western Electric rules conclude that the process is out of control if:

1. One point plots ...

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