In a control chart, what do control limits signify?

Control limits in a control chart are critical as they represent the boundaries of acceptable variation in a process. These limits are statistically derived from the data of the process being monitored, typically set at three standard deviations above and below the process mean. This means they encompass the expected variability in the process under normal operating conditions.

When the data points fall within these control limits, the process is considered to be in control; that is, any variation can be attributed to common causes rather than special causes. If the data points exceed these limits, it signals that there may be something unusual occurring in the process, warranting further investigation or corrective action.

Control limits provide a framework for understanding process stability and performance over time, helping teams to maintain consistent quality. This is fundamental in methodologies like Six Sigma, where the objective is to minimize process variation and improve quality.

In contrast, the other options refer to different aspects unrelated to the specific function of control limits. Highest and lowest costs focus on financial considerations rather than process control. Average production time relates to efficiency metrics, and the number of defects allowed pertains to acceptable quality levels, all of which are distinct from the concept of determining acceptable variation in a control chart.