Qualitative Variance Analysis
Response to the following problem:
With the push for continuous improvement, stable standards may become a thing of the past. As companies strive for and achieve zero defects and no waste, variances quantifiable in terms of dollars become more and more difficult to obtain. To determine variances from a standard, firms are now turning their attention to qualitative measures such as the number of customer complaints or the number of machine setups.
In a 1 to 2 page paper, identify three standards that might be used in a manufacturing environment and three standards that might be used in a service environment that cannot be readily quantifiable in dollars.
Discuss how each of those standards would be measured, as well as how variances from those standards would be measured.