Question

Ms. Sally is implementing a system of statistical control charts (SCC) for the Registrar's Office at SSU in an effort to reduce the overall cost of dropping classes from students. The current cost of withdrawals is $x per month. If an 80% learning curve is expected in the use of the SCC to reduce the cost of withdrawals, what would the percentage reduction in monthly drop-out cost be after the charts have been used for 12 months? (Hint: Model each month as a unit of production).

Answer 1

Wright's cumulative average model: When 80% of learning curve in Statistical process control reduced cost after 12 month can be calculated as follows: (log(learing curve rate Cost2Month= (x)12 log2 (log(0.8) log 2 =(x)12 = (x)0.449 Percentage reduction in monthly scarp cost can be calculated as follows: Reduction cost = (x - Cost) x100 х (x -0.45) X100 -0.45 = 1+ X100 X X = 55% - - $)x1 Thus, the value of percentage reduction in monthly scarp is 55%