Performance Measurement & Management Flashcards
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Read the first 7 Performance Measurement & Management flashcards as text
Which statistical tool plots data points over time to detect trends, shifts, or unusual variation in a process?
Answer: Control chart
Control charts display process measurements over time with upper and lower control limits, allowing managers to distinguish between common cause and special cause variation.
A service center's average handle time improves by 15%, but first-call resolution drops by 10%. What does this scenario illustrate?
Answer: A suboptimization trade-off between speed and quality
Suboptimization occurs when improving one metric causes deterioration in another, highlighting the need to manage a balanced set of performance measures simultaneously.
In a Balanced Scorecard, strategy maps are used primarily to:
Answer: Visualize cause-and-effect relationships between strategic objectives
Strategy maps graphically depict how objectives across the four Balanced Scorecard perspectives link together through cause-and-effect chains to achieve the financial vision.
A plant manager wants to determine whether a new scheduling system actually improved throughput. Which approach provides the strongest evidence?
Answer: Comparing throughput data from before and after implementation using control charts
Quantitative before-and-after comparison using statistical tools provides objective evidence of whether a process change produced a measurable improvement.
What is the primary purpose of setting performance stretch goals?
Answer: To motivate innovation and breakthrough thinking beyond incremental improvement
Stretch goals are deliberately ambitious targets set beyond normal reach to push teams to rethink processes and achieve non-linear performance gains.
When calculating Overall Equipment Effectiveness (OEE), which three factors are multiplied together?
Answer: Availability, Performance, Quality
OEE = Availability × Performance × Quality, capturing losses from downtime, speed reduction, and defects to give a single composite equipment productivity score.
An organization's performance review reveals that actual costs are consistently 12% above budgeted costs across all departments. This pattern suggests:
Answer: The budgeting process itself may be systematically underestimating costs
A consistent, organization-wide variance of similar magnitude points to a systemic flaw in the budgeting methodology rather than isolated management failures.