Planning Control and Analysis Flashcards
What is regression analysis
When using an independent variable to predict the correlation to another variable
What is correlation analysis
The relationship of the independent variable accounting for the dependent variable.
What is probability theory
Studies the likelihood of occurrences
What is the correlation of coefficient
A number from -1 to 1
-Inverse relationship: -1
-Direct Relationship: 1
(R squared: a measure of goodness of fit, figures out how accurate the independent variable is at determining the dependent variable)
Internal failure costs
-reworking defective products
-scrapping defective products
as identified by the inspection process
External failure costs
- warranty expenses
- repair expenses
- product recalls
Inspection costs
Identifies a defect but does not prevent it
Prevention costs
Reduces the rate at which product defect occurs
What are conformance costs
Costs to conforming to quality standards, prevention and appraisal costs
What are non-conformance costs
Costs associated with internal and external failure.
What is TQM (Total Quality Management)
The ability for an organization to continuously make high quality products and services.
What is a credit default swap
Protects the buyer against bond default swaps
What is an interest rate derivative
Fluctuates in value as interest rate changes, protecting an entity from interest rate risk
What are ways to reduce interest rate risk
- Reduce mismatch of AR/AP - interest rates on these accounts can be paid off at the same time rather than sporadically.
- Interest rate derivative - fluctuates a lot
What is standard error
A standard deviation computation
