Types of Licenses in International Trade
International Trade has become the order of the day in the current environment of Globalization. The nature of economies namely under developed, developing and developed countries as well as the availability of natural resources, labor, technology and capital required for production etc play a important role in countries economy as well as its reliance on […]
Supply Chain Network Design & Contributing Factors
Designing Supply Chain Network for each industry or business involves arriving at a satisfactory design framework taking into all elements like product, market, process, technology, costs, external environment and factors and their impact besides evaluating alternate scenarios suiting your specific business requirements. No two supply chain designs can be the same. The network design will […]
Optical Character Recognition and E-Invoicing
Automation of business processes has become the single objective of every multinational corporation. Automation saves a lot of money in the long run. It also streamlines the process and makes it more robust. In the recent past, two technologies have helped companies automate their accounts payable departments. These two technologies are optical character recognition and […]
Disaster Recovery, Crisis Management Plans and Ownership
When and if a disaster strikes any business operation or organization, what helps the Organization to deal with the crisis effectively, continue to run the business operations to the extent possible and get back on the recovery path are the Disaster Recovery and Business Continuity plans. However the effectiveness of the plans depends largely upon […]
Operational/Transactional Processes
Perhaps the most frequently used and the most important type of processes in any company are the operational processes. These are processes which define the primary activities that a company needs to perform in order to successfully execute its business. It is very important to understand the concept of value stream and map the same […]
Once the Scatter plot has been used to find out the correlation between the inputs being measured as well as the desired outputs, it is now time to come up with an equation which shows the precise relationship. This is called Regression. Regression is a technique which summarizes the relationships observed in the Scatter plot in the form of an equation.
In most Six Sigma projects, today the process of coming up with the regression equation is computerised. Hence the personnel need not understand the details that are involved within it. However they need to be well versed with the various types of regression equations. They are as follows:
A typical linear regression equation would look like:
Y = 1.5 + 2x
The Six Sigma team can now answer questions about the effect that the input variable has on the output. They can then decide as top whether the effect is significant when compared to the other variables. They can also decide the correct level of input (x) that needs to be maintained if an output (y) needs to be achieved.
For example:
Service Time = 3 minutes + 2.3 times × Handle time
Let’s say we want the service time to be 7 minutes as per the results we have got from the Voice of Customer. Therefore the handle time should be :
7 - 3 minutes = 2.3 × Handle time
4 minutes = 2.3 × Handle time
4/2.3 = Handle time
Therefore handle time must be 1.74 minutes if the process needs to meet the expectations of the customers.
This is how the regression equation can help us understand whether a factor is significant. It also helps us work the level of inputs required to get the desired output.
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