From the course: Process Improvement Foundations
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Setting action limits: Median moving range
From the course: Process Improvement Foundations
Setting action limits: Median moving range
- So we've already seen that if an event is 50/50 likely to happen, like something being above average, then you need eight before you can be sure that something's changed. But what if the event is quite unlikely? Then you need fewer before you know that something's changed. In fact, turning the question right around, how unlikely does something have to be before just one occurrence warrants an investigation? What is the warning level at which you should act and investigate? For example, have you noticed how your credit card sometimes gets stopped and you get a phone call if you buy something unusually large or several quite large things? The credit card people are doing exactly this calculation to prevent fraud, and personally I'm glad they are even though it can be a bit annoying at times. In your case, how many complaints would you have to have in one month for you to get into action and investigate? How much over…
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