SMU MBA ASSIGNMENTS

Sikkim manipal Solved MBA Assignments, SMU MBA, Solved assignments, 1st sem, 2nd sem, 3rd sem, 4th sem, SMU MBA PROJECTS

Email Us

1. Write a note on the following: a. Pareto chart Pareto Chart

June 05, 2012 By: Meliza Category: 1st SEM

Vilfredo Pareto (1848-1923) discovered that:

· 80% of the wealth in Italy was held by 20% of the population

· 20% of customers accounted for 80% of sales

· 20% of parts accounted for 80% of cost, etc.

These observations were confirmed by Juran (1960) and resulted in what is known as the Pareto Principle.The Pareto Principle states that: “Not all of the causes of a particular phenomenon occur with the same frequency or with the same impact”. Pareto analysis gives recognition to the fact that, invariably, a small number of problem types account for a large percentage of the total number of problems that occur. Thus it is also called as “80/20” rule. Such characteristics can be highlighted using Pareto Charts.

Pareto charts show the most frequently occurring factors. The lengths of the bars represent frequency and are arranged with longest bars on the left and the shortest to the right. In this way the chart visually depicts which situations are more significant.

Analysis of Pareto charts help to make best use of limited resources by targeting the most important problems to tackle. Pareto chart is also called as Pareto diagram or Pareto analysis.

Pareto chart is used:

· When analysing data about the frequency of problems or causes in a process

· When there are many problems or causes and you want to focus on the most significant

· When analysing broad causes by looking at their specific components

 Example of Pareto Analysis

Products may suffer from different defects, but

o the defects occur at different frequency

o only a few defects account for most of the defects present

o different defects incur different costs

So a product line may experience a range of defects (A, B, C … J). Plotting the percentage contribution of each type to total number of faults, gives the bar-plots as shown in the following diagram. Next if, each of these contributions are sequentially summed, a cumulative line plot is obtained. These two plots together make up the Pareto Chart.

 

 

 

 

 

Pareto chart

From the information on the chart, the manufacturer could for example,

· Concentrate on reducing defects A, B and C since they make up total of 75%of all defects

· Focus on eliminating defect E, if that defect causes 40% of the monetary loss

 

 

 

 

                        b. Scatter diagram

 

Scatter Diagram

A scatter diagram is a tool for analysing relationships between two variables. One variable isplotted on the horizontal axis and the other isplotted on the vertical axis. The pattern of theirintersecting points cangraphically show relationship patterns. Most often a scatter diagram is usedto prove or disprove cause-and-effect relationships.

While the diagram shows relationships, it does not by itself prove that one variable causes the other. In addition to showing possible cause and effect relationships, a scatter diagram can show that two variables are from a common cause that is unknown or that one variable can be used as a surrogate for the other.

A scatter plot can suggest various kinds of correlations between variables with a certain confidence interval.Correlations may be positive (rising), negative (falling), or null (uncorrelated). If the pattern of dots slopes from lower left to upper right, it suggests a positive correlation between the variables being studied. If the pattern of dots slopes from upper left to lower right, it suggests a negative correlation.

 When to use Scatter diagram:

You can use Scatter Diagram:

· when you have paired numerical data

· whenyour dependent variable may have multiple values for each value of your independent variable.

· to determine objectively whether a particular cause and effect are related

· to design a control system to ensure that gains from quality improvement efforts are maintained

· when determining whether the two effects that appear to be related, both occur with the same cause or not

 How to use Scatter diagram

Collect data: Gather 50 to 100 paired samples of data that show a possible relationship.

Draw the diagram: Draw roughly equal horizontal and vertical axes of the diagram, creating asquare plotting area. Label the axes in convenient-multiples (1, 2, 5, etc.) increasing on thehorizontal axes from left to rightand on the vertical axis from bottom to top. Label both axes.

Plot the paired data: Plot the data on the chart, using concentric circles toindicate repeated data points

Title and label the diagram

Interpret the data: Scatter diagrams will generally show one of six possible correlations between the variables

A. Strong Positive Correlation The value of Y clearly increases as the value of X increases.

B. Weak Positive Correlation The value of Y increases slightly as the value of X increases.

C. Strong Negative Correlation The value of Y clearly decreases as the value of X increases.

D. Weak Negative Correlation The value of Y decreases slightly as the value of X increases.

E. No Correlation There is no demonstrated connection between the two variables.

F. Complex Correlation The value of Y seems to be related to the value of X, but the relationship is not easily determined

Leave a Reply

You must be logged in to post a comment.