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Correlation and Regression with Excel

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  Correlation is a mutual relationship or connection between two or more continuous variables. Regression is a mathematical model to define that relationship. Process Data Analysis analyzed transfer functions Y = f ( X ) where X was an attribute. Now we will analyze the case of X being a variable. Download Excel file Regression.xlsx from OneDrive to your PC to run the following examples. Correlation We have collected Natural Gas Demand data in sheet Correlation : This is actual daily demand during the month of January and the average local temperature recorded on those days.  From the date time stamp we have computed the day of the week (1 being Monday).  We are looking for factors that may affect demand and two possible factors may be Temperature and DOW. We will use Excel Data Analysis: Correlation Results: We detect a negative ( - 0.85 ) significant correlation between demand and temperature: the lower the temperature the higher the natural gas demand. This is what ...

Value Stream Constraints: Variation

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Analyzing our Value Stream we identify a number of constraints that limit its effective capacity. The most visible constraints are the capacity of the different steps. But there are other, not so obvious, constraints such as the capacity variation of some steps. Process variation has been described as a virus infecting the value stream: it causes chaos and it is often undetected.     Dice Throwing Exercise A bottleneck limits the effective capacity of the whole line. Bottlenecks caused by variation are more subtle and difficult to detect and act upon. Process simulation can help us experience the effects of different types of constraints, try solutions and detect possible side effects. Process simulation helps us understand the value stream dynamic behavior: how variation affects key process metrics such as WIP, Lead time, Throughput, Cycle time, On Time Delivery, etc. Understanding these dynamic effects will enable us to get to the root cause of problems implementing def...