f.

Trends compared over time in cost of quality (COQ) reports

TECHNIQUES USED TO ANALYZE QUALITY PROBLEMS

a. Control charts

i. Statistical quality control (SQC) or statistical process control (SPC): formal means of distinguishing

between random and nonrandom variation in an operating process

ii. Control chart: graph of a series of successive observations of a particular step, procedure, or

operation taken at regular intervals of time

iii. Observations outside control limits are ordinarily regarded as nonrandom and worth investigating

b. Pareto diagrams

a. Observations outside control limits serve as inputs to Pareto diagrams. A Pareto Chart is a graph that

indicates the frequency of defects, as well as their cumulative impact. Pareto Charts are useful to find

the defects to prioritize in order to observe the greatest overall improvement

b. Pareto diagram: chart that indicates how frequently each type of defect occurs, ordered from the

most frequent to the least frequent

c. Cause-and-effect diagrams/Ishikawa/Fishbone

i. Definition: identifies potential causes of failures or defects. The fishbone diagram or Ishikawa

diagram is a cause-and-effect diagram that helps managers to track down the reasons for

imperfections, variations, defects, or failures. The diagram looks just like a fish's skeleton with

the problem at its head and the causes for the problem feeding into the spine.

ii. Major categories of potential causes of failure identified with each cause noted with arrow

within category: general appearance of bone structure of a fish

iii. Analysis of quality problems facilitated by automated equipment and computers that maintain

records of number and types of defects and operating conditions that existed at time defects occurred

NONFINANCIAL MEASURES OF QUALITY AND CUSTOMER SATISFACTION

1. Nonfinancial measures of customer satisfaction

a. Examples of routine nonfinancial measures of quality of design and external failure

i. Market research information on customer preferences and customer satisfaction with specific

product features

ii. Number of defective units shipped to customers as a percentage of total units shipped

iii. Number of customer complaints