When Special Cause Variation Is Detected It Is Normally Eliminated

question 58

True/False

When special cause variation is detected it is normally eliminated by increasing the number of standard deviations (Z value) used to calculate the control limits.

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Definitions:

Contribution Margin Ratio

The percentage of each sales dollar that remains after deducting variable costs, calculated as contribution margin divided by sales.

Net Operating Income

The profit of a business after operating expenses are subtracted from gross income.

Break-even Point

The production level or sales volume at which total revenues equal total expenses, resulting in no net profit or loss.

Break-even Point

The level of production or sales at which the revenues of a business equal its costs, resulting in neither profit nor loss.