COM Performance Measurement & Management 3 — Questions and Answers
Question 1: Which statistical tool plots data points over time to detect trends, shifts, or unusual variation in a process?
- Pareto chart
- Scatter diagram
- Control chart (Correct answer)
- Histogram
Correct 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.
Question 2: A service center's average handle time improves by 15%, but first-call resolution drops by 10%. What does this scenario illustrate?
- A successful efficiency improvement
- A suboptimization trade-off between speed and quality (Correct answer)
- Evidence that the metrics are unreliable
- Normal seasonal variation
Correct 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.
Question 3: In a Balanced Scorecard, strategy maps are used primarily to:
- Replace financial reporting requirements
- Visualize cause-and-effect relationships between strategic objectives (Correct answer)
- Assign individual employee performance ratings
- Map physical facility layouts
Correct 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.
Question 4: A plant manager wants to determine whether a new scheduling system actually improved throughput. Which approach provides the strongest evidence?
- Surveying employees about their satisfaction with the new system
- Comparing throughput data from before and after implementation using control charts (Correct answer)
- Reviewing vendor testimonials about the scheduling system
- Checking if the system was delivered on time and on budget
Correct 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.
Question 5: What is the primary purpose of setting performance stretch goals?
- To ensure all employees qualify for bonuses
- To motivate innovation and breakthrough thinking beyond incremental improvement (Correct answer)
- To replace SMART objectives with vague aspirations
- To reduce the frequency of performance reviews
Correct 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.
Question 6: When calculating Overall Equipment Effectiveness (OEE), which three factors are multiplied together?
- Quality, Cost, Delivery
- Availability, Performance, Quality (Correct answer)
- Uptime, Throughput, Yield
- Reliability, Maintainability, Supportability
Correct answer: Availability, Performance, Quality
OEE = Availability × Performance × Quality, capturing losses from downtime, speed reduction, and defects to give a single composite equipment productivity score.
Question 7: An organization's performance review reveals that actual costs are consistently 12% above budgeted costs across all departments. This pattern suggests:
- Individual department managers are poorly skilled
- The budgeting process itself may be systematically underestimating costs (Correct answer)
- Inflation has recently accelerated beyond normal levels
- The accounting system has an error
Correct 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.
COM Performance Measurement & Management 3
Which statistical tool plots data points over time to detect trends, shifts, or unusual variation in a process?