MAN 101 Presentation 1

MAN 101 Presentation 1 - Quality Standards Quality Control:...

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Unformatted text preview: Quality Standards Quality Control: the What is Quality? process of creating When goods and standards for quality, services meet producing goods that customer meet them, and expectations by measuring finished providing reliable products and services performance. against them. Basics of Quality Control No visual defects Product functions properly Product is clean and packaged properly for proper shipping which prevents damage Possibly even making improvements on the product and/or production to increase quality and efficiency. Benefits of Quality Control Higher customer satisfaction. Higher sales rates. Better reputation for a quality product. Less waste in raw materials. Less waste of production time. Higher rate of overall production efficiency. Cheaper to produce = more profit. How do Companies measure and maintain Quality with Respect to the manufacturing of their products? Quality Measurement Reliability of the product The cost of manufacturing the product. The Capital for the process Meets Consumer's desire/expectations Meets the quality standards Inventory Management The determination of how much of each type of inventory a firm will keep on hand and the ordering, receiving, storing, and tracking of inventory. Goals of Inventory Management To keep down costs of ordering and holding inventories while maintaining enough on hand for production and sales. Good inventory management Enhances product quality Makes operations more efficient Increases profit Bad inventory management Dissatisfied customers Financial difficulties Even bankruptcy How do you determine the best inventory level? Look at the three major costs... 1. The cost of holding inventory 2. The cost of reordering frequently 3. The cost of not keeping enough inventory on hand Trends in Production/Operation Management Growth in global competition Increasingly complex products Increasingly demanding consumers Constant pace of technological change These issues force manufacturers to plan carefully how, where, and when they produce the goods they sell. What can they do to be prepared? Develop new production techniques Develop new manufacturing technologies Make adjustments to keep up with constant technological change How Do Companies Manage Their Inventories? 1) One way companies manage their inventories is by looking at three specific costs: The cost of holding inventory The cost of reordering frequently The cost of not keeping enough inventory on hand. -Managers must measure all three costs and try to minimize them 2) Perpetual Inventory--A continuously updated list of inventory levels, orders, sales, and receipts for all major items. 3) Companies also frequently use computers to track inventory levels, calculate order quantities, and issue purchase orders at the right times. ...
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This note was uploaded on 04/24/2008 for the course MAN 101 taught by Professor N/a during the Fall '07 term at Bay State.

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