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MGT Ch.8.2 - Today's Class Chapter 8 Managing Quality(contd...

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1 Today’s Class Chapter 8: Managing Quality (contd.) Chapter 9: Quality Control and Improvement (I) Announcement of Quiz 2
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2 Part I: Managing Quality (contd.) Review: Managing Quality Eight dimensions of Quality Examples (online), simple calculation Extension to service quality How to implement quality planning, control, and improvement the Quality Circle Managing Quality (contd.) What is relationship between quality and financial performance
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3 Cost of Quality Cost of Quality: all of costs associated with maintaining the quality of goods and services Control Costs Costs for removing defects from the production stream Prevention Costs Appraisal Costs Failure Costs Costs for poor-quality products Internal Failure Costs External Failure Costs
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4 Control Costs Prevention costs Characteristics Prior to production Prevent defects from happening Examples: Quality planning Process planning (Poka Yoke: mistake-proofing) Fool-proof design and internal procedure Disk; Microwave Training
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5 Control Costs (contd.) Appraisal costs Characteristics Production starts Products have not reached the customer Ensure conformance quality (i.e., eliminate defects) Examples: Inspections Instrument maintenance costs Where to inspect I P F
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6 Control Costs (contd.) Appraisal costs (contd.) Quality cannot be inspected into a product 100% perception cannot guarantee perfection. Results from a well-known experiment 100 defective items were added to a “perfect” lot of items Under 100% inspection, First inspection Another three passes Anything left Build quality into the product rather than relying on mass inspection (Deming’s 14 points: No. 3 – Table 8.1).
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7 Failure Costs Internal Failure costs Characteristics Defects have Incurred, but before the delivery to the customers Results of unsatisfactory quality (direct/indirect) Examples: Scrap Rework Downtime: idle facilities and people due to quality problems Cost of corrective action: retest
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8 Failure Costs (contd.) External Failure costs Characteristics Results of poor quality Occurred after the delivery to the customers Examples: Warranty Returned merchandise Complaints
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