Reducing Production Cost Overruns: Project Team Tools

Determining Origins of Increased Costs

Question

A team has been assembled and assigned a project to reduce recent, unanticipated production cost overruns.

Which of the following tools should the project team select to determine the possible origins of the increased costs?

Answers

Explanations

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A. B. C. D.

B.

The tool that the project team should select to determine the possible origins of the increased costs is the Fishbone diagram (also known as Ishikawa diagram or Cause-and-Effect diagram).

The Fishbone diagram is a quality management tool that helps identify the root cause of a problem. It is named after its shape, which resembles the skeleton of a fish, with the problem statement being the "head" and the potential causes being the "bones."

The Fishbone diagram can help the project team to organize and analyze the possible causes of the increased production costs. The team can start by writing the problem statement on the head of the diagram and then identify the major categories of potential causes (e.g., people, process, equipment, materials). The team can then drill down into each category and identify specific factors that may have contributed to the increased costs.

In contrast, a Pareto chart is a tool used to identify the most significant factors contributing to a problem, while a process diagram (also known as a flowchart) is used to document and visualize a process or workflow. A run chart is a tool used to track performance over time.

In summary, the Fishbone diagram is the most appropriate tool for identifying the possible origins of the increased production costs, as it allows the project team to systematically explore the potential causes and identify the root cause(s) of the problem.