Three Sigma Event
A three sigma event is an event that is expected to occur with a probability of about 99.7%. In a normal distribution, three standard deviations from the mean (average) cover about 99.7% of the data points. This means that if you have a normal distribution of data and you plot it on a graph, about 99.7% of the data points will fall within three standard deviations of the mean.
In the context of risk analysis or statistical quality control, a three sigma event might refer to an occurrence that is outside the normal range of expectations, but still within a relatively low level of risk. For example, if a manufacturing process is producing parts with a certain level of variability, a three sigma event might be a part that falls outside the expected range of that variability, but is still within acceptable limits for the process.
It’s important to note that the term “three sigma event” is used somewhat informally, and the specific definition may vary depending on the context in which it is used. In some contexts, a three sigma event might be considered to be a rare or unusual occurrence, while in others it might be considered to be relatively common.