Statistical quality control

In real life and corporate processes, statistical quality control is used. To keep the required quality or quantity during manufacturing, the process must be closely watched and any errors caught before they spiral out of control (Collier & Evans, 2014). Although it is a general rule that out-of-control processes must be identified and addressed, there are some occasions where production managers choose to disregard them. The following are examples of out-of-control processes that were disregarded and regulated processes that were incorrectly altered;

On the stock market, there has been an overreaction to the soaring value of Bitcoin (BTC), and financial analysts have urged for its capping to avoid further rises (Pouliezos & Stavrakakis, 2013). It is because many ignored Bitcoin in the past 2 years and did not adjust their portfolios. Currently, its value against the dollar has gone much higher than was expected. This is an example of how out-of control processes are ignored in business. On the other hand, financial analysts tend to overreact to daily stock reports, which may be due to the interaction of market forces and thereby make adjustments in the portfolios. Since such variations may be due to the market forces, making adjustments will be erroneous.

Examples of out of control process that are ignored in real life are individual’s health condition or getting old. People have no control of old age and health conditions, however, failure to properly address the health issues may lead to other complications. Another example is a thermostat. People have no control over the temperatures in the external environment. When the temperature in the house is lower than the temperature in the external environment, it will force the room temperature to change thereby making the thermostat to heat.

Certain weather conditions like ice storms may lead to misread of the traffic flow. Automated toll systems sometimes tend to misread traffic flows. For instance, if slow traffic is misread for congestion and the toll raise to higher values while people are not charged after ice storm. In accounting, managers may react to the budget variances and find ways to adjust the book of accounts to cater for such variances. Although the budget variances may be under control due to the nature of the company activities, adjusting the variances are examples of erroneous adjustments that are often made to such processes.

Question Two

In business, such errors may lead to excessive losses occurring to the businesspersons. For instance, when analysts raise alarm and stocks are adjusted only to realize the market value remains constant at the end of the day, investors will have to lose their cash. Out of control processed ignored can also lead to misinterpretation of the next step of actions hence leading to losses. When investors ignore the changing value of Bitcoin only to realize that the price is constantly rising, they will forego the profits (Pouliezos & Stavrakakis, 2013). Although variation in the process outputs are believed to be due to the common causes, erroneous errors and ignoring the out-of-control process implies that the process may not be stable even if the analysis indicates that such processes are under control. Given the fact that interpretation of the process status and adjusting the process items directly affect the process stability, occurrence of an error imply that a process may be out-of-control while the analysis indicates that it is under control (Collier & Evans, 2014). Such instances may result to so many products being defective hence leading many variances.

Question Three

When drawing and interpreting the points in an x-bar chart, there is no need to compare specifications to the points in the points on the chart. Given that there is a variation between observations and the sub group averages, relative comparisons will bring a lot of confusion hence wrong interpretation of the process (Collier & Evans, 2014). The general rule is that x-bar charts may be used to detect if a process is out of control. Any observations falling out of the control points must be eliminated to ensure the process remains under control.

X-bar charts measures the characteristics of a given process on a continuous scale. Since the x-charts are concerned with the process averages and not individual observations, drawing specifications in the chart may lead to statistical bias since comparing specific points and process average will automatically indicate that outliers are present in the data (Ahmad, Aslam & Jun, 2014). In some cases, the process may show control relative to the statistical limits thereby prompting to analyze the process capability. However, process capability is only meaningful when the process is stable given that it is almost impossible to estimate the outcomes of unstable process.

It is not meaningful to draw specifications on the x-bar charts since specifications are dealing with items or specific observations while the chart displays averages of several items (Collier & Evans, 2014). Confusing control limit values and specification limit values will lead to misinterpretations of the status of the process hence taking wrong actions when making necessary adjustments to restore the process back under control (Ahmad, Aslam & Jun, 2014).

Question Four

Southwest airlines and other full airlines differ in terms of how they operate and offer their services to the customers. For instance, the boarding process is supposed to reduce the time taken to clear customers (Kee, 2015). Moreover, most airlines work towards reducing the ground time and other cabin services. Competitors in the air transport industry compete through pricing and service delivery strategies. The following are some of the differences between Southwest airlines and its competitors in the air transport industry;

Airplane Boarding Process

In Southwest airlines, passengers are assigned boarding groups and positions when they check in. The details of the boarding group and position indicated in the boarding pass are used as unique identifier to reserve the position for a passenger. Compared to other airlines, Southwest airlines have very organized lines (Kee, 2015). Passengers can easily find where to line since the gate areas have numbered posts making it easy to find out a particular boarding group and the designated place in the line. In other airlines, however, passengers board depending on their classes. First classes passengers are supposed to board first and the boards are assigned by seats and rows.

Cabin Services

Unlike other companies, Southwest airlines are keen on quality service delivery and comfort of the passengers. The company recently unveiled an eco-friendly cabin that offers customers ample space they require for their personal distance/ space. It has comfortable cushions, lumbar support, and headrests are provided on each passenger seat to enhance positive customer experience and satisfaction (Kee, 2015). Quality cabin services are offered at Southwest airlines compared to other competitors. For instance, variety of beverages and snacks are offered to clients during the flight. Other than beverages and snacks, clients have access wireless network during the flights. Moreover, the cabin crews have positive attitude and good customer relations. However, Southwest airlines do not provide flight meals given that most of their flights are shorter. Other large airlines provide flight meals, pillows, and blankets since they have long flights.

Ticket Transfer to other Southwest Flights

Southwest airline have adopted ticketless travels. Passengers have options of changing their online-booked reservations for other flights at no charge. In order to avoid circumstances of misinformation about the flight changes, the company uses the customer contact details to notify them in case the flight changes may affect the customer travel itinerary. In other airlines, there are still elements of electronic and paper ticketing. The adopted reservation systems are more complex compared to Southwest airlines. Additionally, they have rebooking fees for missed flights and changing reservations.

Frequent Flyer Program

A designed program that seeks to reward customers for their loyalty to Southwest airlines is currently operational. Rapid Reward program ensures that customers are offered one free flight after eight consecutive flights. Moreover, customers can also redeem their awarded points for unlimited seat choices and free flights. In other companies, there exist complex rewarding systems for points and free flights.

Baggage Handling

Southwest airlines allow customers to carry two pieces of luggage for checking. However, there are standard charges for checking the baggage at any checking point. Other companies allow for customers two only one bag per passenger. They also charge for checking luggage. It is worth noting that Southwest airlines have created brand loyalty through their policy of checking in with two bags contrary to what other companies require of travelers. Moreover, it has been a source of value stream to both the customers and the company (Kee, 2015).

Seat Assignment

There are no assigned seats in Southwest airlines. The company believes that passengers have the freedom to sit wherever they like. Customers on board have the freedom to select any unoccupied seat as long as it derives their comfort and adds to their customer experience. Seats are allocated on first come first serve basis. In other airlines, however, passengers can pick their seats once they book their air tickets.

Service Encounters

Although most customers are eligible for self-service kiosks, some categories are not eligible for such services. Examples are customers travelling with pets, unaccompanied by minors, age qualifying fares like military fare. The ineligible categories are supposed to check in at the airport counter. The company has cross-trained workers who strive to offer quality services and a conducive atmosphere to the passengers. The company uses customer contact information to communicate on the hours for check-in, possible alterations to the daily schedule, other issues that may inconvenience the clients. Large companies have very professional members of staff. Job roles are defined by labor unions and there is no room for cross training.

Reference

Ahmad, L., Aslam, M., & Jun, C. H. (2014). Designing of X-bar control charts based on process capability index using repetitive sampling. Transactions of the Institute of Measurement and Control, 36(3), 367-374.

Collier, D. A., & Evans, J. R. (2014). OM 5. Nelson Education.

Kee, W. (2015). Comparison of Shareholder value between Full-Service Airlines (FSAs) and Low-Cost Carriers (LCCs).

Pouliezos, A., & Stavrakakis, G. S. (2013). Real time fault monitoring of industrial processes (Vol. 12). Springer Science & Business Media.