Nicole T.

Aretaño
2BSA4
Assign#2
OPEMAN-18

Assignment#2 Questions

2.1. How does the consumer’s perspective of quality differ from the producer’s?

 A consumer's view of quality differs from a producer's

perspective. Consumers think about fitness for use, which means that
a product should do what it is supposed to do. ... Producers believe
that a quality product has quality of conformance, which means that
their products are designed and produced to specifications.

For the producer:

 (1) Differentiation - quality is a competitive differentiator

 (2) Risk reduction - there are plenty of financial risks to consider once
your products leave the factory floor. For example, recalls are costly
endeavors and their negative influence on customer and retail
perceptions of your company could tarnish your name indefinitely.
 (3) Less customer complaints and returns - quality product will
minimize use of producers resources for customer complaints and
returns
 (4) Increased goodwill - by producing better quality products and
satisfying customer’s needs, a producer can easily raise finance from
the market
 (5) Higher morale of employees - greatly helpful in increasing the
morale of employees
 (6) Increased sales - production of quality products help attract more
customers and thereby help increase sales

For the consumer:

 (1) Longevity – consumers care about how long a product can

performs its function
 (2) Fulfillment – consumers care about whether or not the product
fulfills a specific need or solves a specific problem for the customer
 (3) Safety – consumer care about the safety level of the product, i.e.
whether or not the customer feels comfortable using it
 (4) Usability – consumer care about the ease of use associated with the
product
 (5) Aesthetics - people care about how a product looks, feels, sounds,
tastes or smells. The colors, prints, shapes, textures and features make
a difference

2.2. Briefly describe the dimensions of quality that a customer looks for in a
product, and apply them to a specific product.

 Performance
Nicole T. Aretaño
2BSA4
Assign#2
OPEMAN-18

Performance refers to a product's primary operating characteristics. For an

automobile, performance would include traits like acceleration, handling, cruising
speed, and comfort. Because this dimension of quality involves measurable attributes,
brands can usually be ranked objectively on individual aspects of performance.
Overall performance rankings, however, are more difficult to develop, especially
when they involve benefits that not every customer needs.

 2. Features
Features are usually the secondary aspects of performance, the "bells and whistles" of
products and services, those characteristics that supplement their basic functioning.
The line separating primary performance characteristics from secondary features is
often difficult to draw. What is crucial is that features involve objective and
measurable attributes; objective individual needs, not prejudices, affect their
translation into quality differences.
 
 3. Reliability
This dimension reflects the probability of a product malfunctioning or failing within a
specified time period. Among the most common measures of reliability are the mean
time to first failure, the mean time between failures, and the failure rate per unit time.
Because these measures require a product to be in use for a specified period, they are
more relevant to durable goods than to products or services that are consumed
instantly.
 
 4. Conformance
Conformance is the degree to which a product's design and operating characteristics
meet established standards. The two most common measures of failure in
conformance are defect rates in the factory and, once a product is in the hands of the
customer, the incidence of service calls. These measures neglect other deviations from
standard, like misspelled labels or shoddy construction, that do not lead to service or
repair.
 
 5. Durability
A measure of product life, durability has both economic and technical dimensions.
Technically, durability can be defined as the amount of use one gets from a product
before it deteriorates. Alternatively, it may be defined as the amount of use one gets
from a product before it breaks down and replacement is preferable to continued
repair.
 
 6. Serviceability
Serviceability is the speed, courtesy, competence, and ease of repair. Consumers are
concerned not only about a product breaking down but also about the time before
service is restored, the timeliness with which service appointments are kept, the nature
of dealings with service personnel, and the frequency with which service calls or
repairs fail to correct outstanding problems. In those cases where problems are not
immediately resolved and complaints are filed, a company's complaints handling
procedures are also likely to affect customers' ultimate evaluation of product and
service quality.
 
Nicole T. Aretaño
2BSA4
Assign#2
OPEMAN-18

 7. Aesthetics
Aesthetics is a subjective dimension of quality. How a product looks, feels, sounds,
tastes, or smells is a matter of personal judgement and a reflection of individual
preference. On this dimension of quality it may be difficult to please everyone.
 
 8. Perceived Quality
Consumers do not always have complete information about a product's or service's
attributes; indirect measures may be their only basis for comparing brands. A
product's durability for example can seldom be observed directly; it must usually be
inferred from various tangible and intangible aspects of the product. In such
circumstances, images, advertising, and brand names - inferences about quality rather
than the reality itself - can be critical.

2.3. How does quality of design differ from quality of conformance?

 The distinction between design quality and conformance quality has not been
systematically analyzed in the literature. On the one hand, there is no
sufficient distinction between these two elements in reference to many TQM
themes, which are addressed too ‘totally’ in the sense that quality is taken as
a whole, undivided phenomenon.
 On the other hand, quality of design and quality of conformance are referred
to as separate, independently coexisting phenomena. This paper studies these
two quality dimensions as opposite and conflicting sides of a paradox that
complicates quality management. Conflict between design and conformance
quality can be handled in two main ways.
 One is a contingency approach, whose purpose is to determine correct
prioritization between the two dimensions and allocate resources
accordingly. This paper focuses on contextual variables such as: stages of
industry, product, and organizational life cycle; organizational technology;
generic competitive strategy; international strategy; and level of uncertainty.
 The second possibility is to employ an integrative, or synergistic, approach,
which is based on a win-win perspective that the improvement of one
element can contribute to the improvement of another.

2.4. Define the two major categories of cost of quality and how they relate to each
other.

 The term “cost of quality” refers to all of the costs that are incurred to prevent
defects in products, or costs that are a result of defects in products.
 There are 2 main categories within the definition of Cost of quality. They are
Cost of Conformance and Cost of Non Conformance.
Cost of Conformance
 These costs are incurred in an effort to keep defective products from falling
into the hands of customers. The Cost of Conformance is made up of
Nicole T. Aretaño
2BSA4
Assign#2
OPEMAN-18

Preventions costs and Appraisal costs.

Prevention Costs
 Prevention costs includes all those costs which are incurred for activities that
are specifically designed to prevent poor product quality from happening in
the first place. It is much less expensive to prevent a problem from happening
than it is to find and correct the problem after it has occurred.
Prevention costs are incurred for activities whose purpose is to reduce the
number of defects. Organizations employ many techniques to prevent defects,
including statistical process control, quality engineering, and training.
Appraisal Costs
 Appraisal costs, which are also called inspection costs, are those costs which
are incurred to identify defective products before they are shipped to
customers. However, performing appraisal activities does not prevent defects
from occurring. Most managers now realize that maintaining a team of
inspectors is not an effective approach to quality control.
A better approach is asking employees to be responsible for their own quality
control, along with creating designs for how to manufacture a defect-free
product. This approach allows quality to be built into the product, rather than
relying on inspections to identify any defects.
 Cost of Non Conformance
 These costs are incurred because defects are produced despite efforts by the
organization to prevent them. Therefore these costs are also known as costs of
poor quality. These failure costs are incurred when a product fails to conform
to its design specifications .The cost of nonconformance is made up of internal
failure costs and external failure costs.
Internal Failure Costs
 Internal failure costs result from identification of defects before they are
shipped to customers. They are identified within the scope of the project.
These costs include rejected products, reworking of defective units, and
downtime caused by quality problems.
It also includes any costs involved if the company has to reject and throw parts
of their project work, which is also called “scrap”. If an organization’s
appraisal activities are effective, it has a better chance of detecting defects
internally. This increases the level of internal failure costs.
External Failure Costs
 External failure costs are costs that are a result of delivering a defective
product to the customer. These costs include warranty, repairs and
replacements, product recalls, liabilities arising from legal action against
company, and lost sales arising from a reputation for poor quality. Such costs
can even decimate a business’s profits.
External failure costs also give rise to intangible costs. For instance, an
organization may lose its future business with its existing customer for
delivering a product of poor quality. These kinds of costs are not there on the
balance sheet, but they can definitely have an adverse impact on the income
statement. The best approach an organization can follow in these situations is
to ensure that defective products do not reach the customer.
Nicole T. Aretaño
2BSA4
Assign#2
OPEMAN-18

2.5. What is the difference between internal and external failure costs?

 By reducing our internal failures we can ensure that they don’t slip through to
become external failures. Even if we have an external failure, we should act
fast and resolve the issue with the customer .This is the hallmark of good
customer service.
 Thus Cost of Quality includes Costs of Conformance (prevention costs and
appraisal costs) and Cost of Non Conformance (internal failure costs and
external failure costs) .This technique helps us calibrate the amount we spend
to spending to assure quality. It also involves looking at what will be the costs
of conformance and costs of nonconformance on the project and creating an
appropriate balance.

Sources:

http://www.1000ventures.com/business_guide/crosscuttings/bizsys_customer.html

https://www.quora.com/Why-is-the-quality-important-to-both-producers-and-
consumers

https://www.ifm.eng.cam.ac.uk/research/dstools/quality-framework/

https://www.tandfonline.com/doi/abs/

https://www.simplilearn.com/project-quality-management-cost-of-quality-article