MGT 3200 Study guide Chapter 3 and 4

MGT 3200 Study guide Chapter 3 and 4 - Chapter 3 3-1....

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Chapter 3 3-1. Define quality Quality is the ability of a product or service to meet customer expectations and/or needs 3-2. Describe the importance of process improvement to quality The point here is that quality as experienced by the customer is generally an output of a process. So, to improve the outputs, we focus on improving the underlying processes. In other words, an improved process will increase quality. 3-3. List and describe three implications of quality 1. Liability: these are the costs to the company for having a wrong process (recalls, pay fines and/or damages, returns, etc) 2. Company Reputation: the stigma the company has to carry for performing a wrong process (Toyota’s brakes, Hyundai poor quality in the past, etc) 3. Country Reputation: the reputation that the country has for its companies products (made in China generally means poor quality while made in Germany means excellent quality) 3-4. List and define four costs of quality. Relate the significance of these costs to one another. 1. External Failure Cost: occurs when a failure reaches a customer causing returns, recalls, lost sales or a negative public relations 2. Internal Failure Cost: when failures are cut before they reach the customer causing scrap, and rework but the effect isn’t as big as in an external failure cost. 3. Appraisal Cost: Is the cost of paying inspectors and/or quality managers to control and measure a product’s quality (inspection costs). This cost is cheaper than Internal Failure 4. Prevention: is stopping defects from occurring by improving processes and technologies. Prevention ha the lowest cost on the long term but has the higher on the short term.
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MGT 3200 Study guide Chapter 3 and 4 - Chapter 3 3-1....

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