In this case it is cheaper not to inspect assuming that the costs have all been

In this case it is cheaper not to inspect assuming

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defective units is (2 defective units)($40/defective unit) or $80. In this case it is cheaper not to inspect, assuming that the costs have all been measured accurately. 3. Solution to ‘Applying TQM in Manufacturing versus Administration’ [Costs of measuring output and TQM] The ability of TQM to deliver cost savings and performance enhancements depends directly on how easy it is to measure and observe the output of the process. If a TQM team’s output is easy to measure, it is easier to hold the team members responsible for improving quality. If quality improvements are difficult to observe, then holding team members responsible imposes more risk on them. It is easier for them to argue that they didn’t achieve their goals because they were hard to observe. If the benefits from TQM are lower because it is more difficult to observe the TQM output, less will be invested in such activities. Measuring quality improvements in a manufactured process tends to be easier than a service. Engineering standards can be set for a manufactured good and conformance to the standards can be relatively easy to measure. But the output of many administrative
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Exercises MA in a Changing Environment 1 8 .0 2. 20 20 2 departments is multidimensional and often hard to observe. Manufacturing involves repetitive processes with few exceptions. Administrative functions often involve handling numerous exceptions. It is likely to be easier to observe quality improvements in a television set than it is in a human resources department or a legal department.
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  • Fall '18
  • $1, $100, $40, $80, defective units

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