COB 300C

Fall, 2013
Test 2 Study Guide

1. Quality Management
a. Defining quality and quality dimensions
Quality- The ability of a product or service to consistently meet or exceed customer
requirements or expectations
Quality Dimensions- 8 dimensions that judge quality
o Performance- Main characteristics of the product
o Aesthetics- Appearance, feel, smell, taste
o Special features- extra characteristics
o Conformance- How well a product corresponds to design specifications
o Reliability- Dependable performance
o Durability- Ability to perform over time
o Perceived Quality- Indirect evaluation of quality (reputation)
o Serviceability- Handling of complaints or repairs
b. The determinants of quality
The degree to which a product or service successfully satisfies its intended purpose
o Design
o How well the product conforms to the design
o Ease of use
o Service after delivery
c. Cost of quality
Appraisal costs, prevention costs and failure costs
Appraisal- related to inspection, testing and other activities intended to uncover defects
Prevention- Related to attempts to prevent defects from occurring
Failure- Costs associated with defective parts or faulty services
o Internal failures- discovered during production
o External failures- Discovered after delivery to customer
d. Quality certification: ISO 9000 standards and requirements
ISO 9000- pertains to quality management.
o What an organization does to ensure that its products or services conform to
customers requirements
e. Total Quality Management and Six-Sigma
Total Quality Management- the quest for quality in an organization
o Continuous improvement
o Involvement of everyone
o Customer satisfaction

Six Sigma- Having no more than 3.4 defects per million opportunities in any process.
o A program designed to reduce the occurrence of defects to achieve lower costs
and improved customer satisfaction
f. Problem solving and process improvement
1. Define the problem and establish an improvement goal
2. Develop performance measures and collect data
3. Analyze the problem
4. Generate possible solutions
5. Choose a solution
6. Implement the solution
7. Monitor the solution
Process Improvement- A systematic approach to improving a process
g. The seven basic quality tools: descriptions and functions
Flowcharts- Visual representation of a process
Check Sheet- A simple tool frequently used for problem identification, records and
organizes data for collection and analysis
Histograms- A chart of empirical frequency distribution
Pareto Chart- A diagram that arranges categories from highest to lowest frequency
Scatter diagram- A graph that shows the degree and direction of relationship between 2
variables
Control Chart- A statistical chart of time-ordered values of a sample statistic
Cause and Effect Diagram- A diagram used to organize a search for the cause of a
problem (Fishbone Diagram)
h. Quality and the supply chain
i. Quality and Operations Strategy.
Quality is a never ending journey, Customer satisfaction is key.

2. Quality Control
a. Statistical Process Control
Define. Describe use and purpose.
o Quality Control- A process that evaluates output relative to a standard
and takes corrective action when output doesnt meet standards
o Statistical process control- quality control efforts that occur during
production
o Inspections of lots, acceptance sampling, Designing quality into the
process,
Quality control for variables and attributes
o Attributes- Data that is counted
o Variables- Data that is measured, continuous scale

Types of charts, their uses and construction and conclusions made from results
(interpretation)
o Control Chart- Time-ordered plot of sample statistics
Distinguishes between random variability and nonrandom
variability
Has upper and lower control limits
o Mean Chart- Based on normal distribution
o Range Chart- Used to monitor process dispersion
o P-Chart- Control chart for variables, monitors the proportion of
defective items generated by a process
o C-Chart- Control chart for attributes, Used to monitor the number of
defects per unit
b. Tolerances, control limits, and process variability
a. Control Limits- Upper and Lower limits
b. Nonrandomness means process is unstable, corrective action is needed to eliminate
nonrandomness
c. If it is stable, the variability must process output within conforming range for
performance criteria
c. Type I and type II errors
a. Type 1 Error- Concluding it is not in control when it is
b. Type 2 Error- Concluding it is in control when it is not
3. Process capability (CP)
a. Define-the inherent variability of process output relative to the variation allowed by design
specifications
b. Compute and interpret = (Upper specification lower specification)/(6*standard Dev)
c. Find probability of producing within specification limits
d. Determine how to achieve process capability by changing specification limits or changing
process variation (standard deviation)
4. Reliability (Quantitative)
a. The probability that a product or system will function when activated. Quantify as a percent
or probability. Analyze the impact of redundancy (back-up components).
b. The probability that a product or system will function for a given length of time.

5. Inventory management (Partially conceptual, mostly quantitative).

a. EOQ
Minimizes sum of annual costs
c. Fixed quantity, variable interval

i.
ii.
iii.
iv.
v.

One product
Needs annual demand
Demand is even
Same lead time
No quantity discount

c. ABC analysis
d. EPQ
Batches
One item
Annual demand requirement known
Usage rate constant
Constant production rate
e. Buffers
d. Pipeline inventory