Economic Order Quantity (EOQ)

EOQ is an inventory management formula used to determine the optimal order size that minimizes the sum of ordering and holding costs. The classic formula is:

$$EOQ = \sqrt{\frac{2DS}{H}}$$

where:
• D = annual demand
• S = ordering cost per order
• H = holding cost per unit per year

See also: Inventory Management, Reorder Point

Efficiency

Efficiency measures how well resources are utilized to achieve a desired output. It is often expressed as the ratio of useful output to total input, highlighting the performance of a process or system.
See also: Productivity, Process Optimization

Eight Disciplines (8D) Model

The 8D model is a structured, team-based problem-solving process used to identify, correct, and eliminate recurring problems. The eight disciplines are:

1. D1 – Establish the Team
2. D2 – Describe the Problem
3. D3 – Implement Interim Containment Actions
4. D4 – Define and Verify Root Causes
5. D5 – Choose and Verify Permanent Corrective Actions
6. D6 – Implement Permanent Corrective Actions
7. D7 – Prevent Recurrence
8. D8 – Congratulate the Team

See also: Root Cause Analysis, Corrective and Preventive Action (CAPA)

Eight Wastes

In Lean manufacturing, the eight wastes refer to non-value-added activities that hinder process efficiency. They include:
• Overproduction
• Waiting
• Transportation
• Over-processing
• Inventory
• Motion
• Defects
• Unused Talent (or Underutilized Skills)

See also: Lean Manufacturing, Muda

Eighty-Twenty (80-20) Principle

Also known as the Pareto Principle, the 80-20 principle states that approximately 80% of effects come from 20% of causes. In quality management, this helps prioritize efforts on the few issues that cause the majority of problems.
See also: Pareto Analysis, Root Cause Analysis

Elder-Johnson Method

The Elder-Johnson method is a less-common statistical approach utilized in quality and reliability analysis. It is designed to address situations where data exhibit non-normal distribution characteristics, offering robust alternatives for determining control limits and process behavior.
See also: Robust Statistics, Process Capability Analysis

Employee Engagement

Employee engagement refers to the emotional commitment and involvement employees have toward their organization and its goals. Highly engaged employees are typically more motivated, productive, and aligned with the company’s objectives.
See also: Employee Satisfaction, Organizational Commitment

Employee Involvement (EI)

Employee involvement (EI) describes the active participation of employees in decision-making and process improvement initiatives. This practice helps harness frontline insights, fostering a collaborative work environment and continuous improvement.
See also: Empowerment, Employee Engagement

End User

The end user is the final consumer of a product or service. Feedback from end users is critical for ensuring that design and functionality meet real-world requirements and expectations.
See also: Customer, User Experience

Environmental Management System (EMS)

An Environmental Management System (EMS) is a framework that enables an organization to manage its environmental responsibilities systematically. It supports continuous improvement in environmental performance and compliance with regulatory requirements.
See also: ISO 14001, Sustainability

Equipment Availability

Equipment availability is the percentage of time that machinery or equipment is operational and ready for use in production. This metric is crucial for maintaining high levels of productivity and efficient process performance.
See also: Uptime, Maintenance

Error

In quality management, an error is a deviation from the intended or correct outcome. Errors can lead to defects or nonconformities in products or processes, and their reduction is a key focus in continuous improvement efforts.
See also: Mistake, Defect

Error Proofing (Poka-Yoke)

Error proofing, or poka-yoke, involves designing processes, tools, or devices that help prevent or immediately signal an error. The goal is to eliminate defects by avoiding human mistakes before they occur.
See also: Quality Control, Mistake-Proofing

EWMA (Exponentially Weighted Moving Average) Chart

An EWMA chart is a control chart used in statistical process control that applies exponentially decreasing weights to past data. This makes it particularly sensitive to small shifts in the process average over time.
See also: Control Charts, Process Monitoring

Expectation

In a statistical context, expectation refers to the theoretical mean or average value of a random variable. It is a measure of central tendency calculated as the sum of all possible values weighted by their probabilities.
See also: Expected Value, Mean

Expected Value

The expected value is the long-run average outcome of a random variable over numerous trials. It is derived by summing the products of each possible outcome and their corresponding probabilities.
See also: Expectation, Statistical Analysis

Experimental Design

Experimental design is the process of planning experiments to ensure that valid, objective conclusions can be made about causal relationships. It involves identifying independent and dependent variables, controlling extraneous factors, and applying randomization where applicable.
See also: DOE (Design of Experiments), Hypothesis Testing

Exploratory Data Analysis (EDA)

Exploratory Data Analysis (EDA) is an approach for analyzing data sets to summarize their key characteristics—often using visual methods—before formal modeling. It helps in detecting patterns, spotting anomalies, and testing assumptions.
See also: Data Visualization, Descriptive Statistics

External Customer

An external customer is an individual or organization that purchases or receives a product or service from a company. Their satisfaction is critical, as it directly affects the company’s reputation and market success.
See also: Customer Satisfaction, Market Analysis

External Failure

An external failure occurs when quality issues are detected after the product or service has reached the customer. Examples include product returns, warranty claims, or service complaints.
See also: Quality Costs, Internal Failure

External Failure Cost

External failure cost refers to the expenses incurred due to defects detected after a product has been delivered to the customer. This includes warranty repairs, replacements, recalls, and damage to brand reputation.
See also: Quality Cost, Prevention Costs

External Setup

External setup involves preparatory work on machinery or processes performed while equipment is not in active production. This proactive setup aims to reduce overall changeover time and minimize production downtime.
See also: Setup Time, Changeover