17 -- Business Performance

17 -- Business Performance - CPA BEC STUDY UNIT 17 Business...

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CPA BEC - STUDY UNIT 17 Business Performance: Core Concepts A. Quality Considerations 1. Overall, an organization must assess quality in two fundamental areas: process quality and product quality. Process quality assesses the effectiveness and efficiency of the organization’s internal operations. Product quality focuses on the conformance of the organization’s output to customer expectations. 2. Management processes for the improvement of quality include the Plan-Do-Check-Act cycle (the Deming Wheel), kaizen, employee involvement, s uppliers’ management, competitive benchmarking, quality training, and reward and recognition. 3. Tools for analyzing quality control problems include statistical quality control charts, Pareto (80:20) charts, fishbone (cause-and-effect) diagrams, and the Taguchi quality loss function. 4. Measures for the assessment of quality must include both nonfinancial measures of internal performance and nonfinancial measures of customer satisfaction. 5. The costs of quality are generally divided into two major categories and four subcategories: a. Conformance costs include costs of prevention and costs of appraisal, which are financial measures of internal performance. Prevention attempts to avoid defective output. These costs include (1) preventive maintenance, (2) employee training, (3) review of equipment design, and (4) evaluation of suppliers. Appraisal embraces such activities as statistical quality control programs, inspection, and testing. b.
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This note was uploaded on 08/29/2010 for the course CBEAM BEC taught by Professor Gleim during the Spring '10 term at De La Salle Lipa.

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17 -- Business Performance - CPA BEC STUDY UNIT 17 Business...

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