What is one assumption of a quality control chart regarding manager skill?

A quality control chart operates on the assumption that the manager has no inherent investment skill, focusing instead on the consistency and variability of the manager's performance. This is crucial because the primary purpose of a quality control chart is to monitor the performance over time relative to preset control limits. It assumes that any variations in performance are due to random chance or common causes rather than a direct result of skill or expertise.

If the assumption were that the manager has exceptional skill or that their skills improve over time, this could introduce bias into the analysis and complicate the interpretation of the control chart. Similarly, acknowledging that market fluctuations influence the manager's performance could obscure the data needed to assess the manager's consistency. Thus, the framework relies on the notion that the manager operates under standard conditions, ensuring any deviations from expected performance can be identified and addressed appropriately.