Ch5 - Chapter 5 Quality and Performance Costs of Quality...

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Chapter 5. Quality and Performance Costs of Quality Total Quality Management Six Sigma Acceptance Sampling Statistical Process Control Statistical Process Control Methods Process Capability
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Product and Process Improvement Short-run product improvement requires choosing among competing objectives Long-run process improvement requires improving the process so that multiple objectives can be improved simultaneously Low Cost High Quality Fast Response Good & Fast
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The Long Run Advantages of Quality Improvement Quality Implications for System-wide Improvement: quality promotes cycle time reduction (faster) quality promotes variability reduction (cheaper) quality promotes better management (more responsive) Quality Implications on Profitability Revenue growth: higher price and better reputation Cost elimination: higher productivity and less scrap
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Philip Crosby Former VP of quality control. Wrote “Quality is Free: The Art of Making Quality Certain” Proposed: “Zero Defects” as the goal for quality “Consider the AQL you would establish on the product you buy. Would you accept an automobile that you knew in advance was 15% defective? 5%? 1%? 1/2%? How about nurses that care for newborn babies? Would an AQL of 3% on mishandling be too rigid?” “Mistakes are caused by lack of knowledge and lack of attention
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Crosby’s Quality Postures Uncertainty We don’t know why we have problems with quality Awakening It is absolutely necessary to always have problems with quality Enlightenment Through management commitment and quality improvement we are identifying and resolving our problems Wisdom Defect prevention is a routine part of our operation Certainty We know why we don’t have problems with quality Cost of quality as a percentage of sales Reported Actual ??? 20% 3% 18% 8% 12% 6% 8% 2% 2%
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A failure to satisfy a customer is considered a defect, and defects impart costs: Prevention costs Appraisal costs Internal failure costs External failure costs Costs of Quality
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Calculation of Yield Loss B(1-d 1 )(1-d 2 )(1-d 3 )…(1-d n ) = m Thus: B=m/(1-d 1 )(1-d 2 )(1-d 3 )…(1-d n ) Where: d i = proportion of defectives generated by operation i n = number of operations m = number of finished products B = raw material started in process Example: 1000 finished product needed from a flow cell 4 operations generating 2%,3%,5%,3% proportion defective respectively. How many units must be started in the process?
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2% 5% 3% 3% 1000 1142 1119 1086 1031 31 55 33 23 What are the quality costs associated with these defects? Classify by:
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Ch5 - Chapter 5 Quality and Performance Costs of Quality...

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