Performance Rating and the Six-Sigma Theory
Not what you're looking for?
A manager states that his process is really working well. Out of 1,500 parts, 1,477 were produced free of a particular defect and passed inspection. Based upon Six-Sigma theory, how would you rate this performance, other things being equal.
Please provide an example!
Purchase this Solution
Solution Summary
Based on the Six-Sigma theory, this solution explains the following problem in a step-by-step format: A manager states that his process is really working well. Out of 1,500 parts, 1,477 were produced free of a particular defect and passed inspection. Based upon Six-Sigma theory, how would you rate this performance, other things being equal.
Solution Preview
Hi,
Interesting question! Let's take a look at two examples first, and then apply the information to your question:
Example: The current average industry runs at four sigma, which corresponds to 6210 defects per million opportunities. Depending on the exact definition of "defect" in payroll processing, for example, this sigma level could be interpreted as 6 out of every 1000 paychecks having an error. As "four sigma" is the average current performance, there are industry sectors running above and below this value. Internal Revenue Service (IRS) phone-in tax advice, for instance, runs at roughly two sigma, which corresponds to 308,537 errors per million opportunities. Again, depending on the exact definition of defect, this could be interpreted as 30 out of 100 phone calls resulting in erroneous tax advice. ("Two Sigma" performance is where many noncompetitive companies run.) On the other extreme, ...
Purchase this Solution
Free BrainMass Quizzes
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Introduction to Finance
This quiz test introductory finance topics.
Accounting: Statement of Cash flows
This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.
Marketing Management Philosophies Quiz
A test on how well a student understands the basic assumptions of marketers on buyers that will form a basis of their marketing strategies.
Production and cost theory
Understanding production and cost phenomena will permit firms to make wise decisions concerning output volume.