Ch 19 slides

Ch 19 slides - 1 Quality, Time, and the Quality, Time, and...

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Unformatted text preview: 1 Quality, Time, and the Quality, Time, and the Theory of Constraints Theory of Constraints Chapter 19 2 Quality The total features and characteristics of a product or service, made or performed according to specifications, to satisfy customers at the time of purchase and during use 3 Quality Improves customer satisfaction Reduces costs Shorter delivery times Shorter development times Reduced inventory levels 4 Quality Scorecards play a major role in good quality programs, used to measure quality, time and increased throughput, in order to satisfy customers, and to gain a competitive advantage 5 Cost of Quality Costs incurred to prevent, or the costs arising, as a result of producing a low quality product or service 6 Two Aspects of Quality Two Aspects of Quality Actual Performance Design Specifications Customer Satisfaction Quality of Design Failure Conformance Quality Failure How well products meet customer needs Performance of product or service relative to its design specifications 7 The four cost categories in a cost-of-quality program. 8 Costs of Quality Costs of Quality Prevention costs Costs incurred to preclude manufacturing of products that do not meet specifications Appraisal costs Costs to detect which products do not meet specifications Internal failure costs Costs incurred on defective products before shipped to customer External failure costs Costs incurred on Defective products after shipped to customer 9 Costs of Quality Costs of Quality Prevention costs Design Engineering Process Engineering Preventive Maintenance Quality training Appraisal costs Inspection Product testing Internal failure costs Spoilage Rework Scrap Equipment breakdown External failure costs Customer support Warrant Repair Costs Liability Claims 10 Activity Based Approach to Activity Based Approach to Determining the Cost of Quality Determining the Cost of Quality 1. Identify product (s) 2. Identify the direct costs of quality of the product (s) 3. Select the cost-allocation bases to use for the allocating of indirect costs of quality to the products 4. Identify the indirect costs of quality associated with each cost-allocation base 5. Compute the rate per unit 6. Compute the indirect costs of quality allocated to the product 7. Compute the total costs of quality of the product 11 Costs of Quality Example Costs of Quality Example Vegas Photo Corporation made 10,000 photocopying machines last year. Vegas Photo determines the costs of quality of its photocopying machines using a 7-step activity-based costing approach. 12 Costs of Quality (Steps 1 and 2) Costs of Quality (Steps 1 and 2) Identify cost objects. 10,000 photocopying machines Identify the direct costs of quality of the products....
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Ch 19 slides - 1 Quality, Time, and the Quality, Time, and...

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