Tutorial Letter 201/3/2021: Quality Management and Techniques

MNO2602/201/3/2021
Tutorial Letter 201/3/2021
Quality Management and Techniques

MNO2602
Semesters 1 and 2
Department of Operations Management
IMPORTANT INFORMATION
This tutorial letter contains important information
about your module.
CONTENTS
1 Introduction .......................................................................................................................... 3
2 Detailed answers to the assignments ................................................................................ 3
2.1 Answers to Assignment 01 ............................................................................................. 3
2.2 Answers to Assignment 02 ............................................................................................ 15
2.3 Answers to Assignment 03 (self-assessment) ............................................................... 33
3 Examination paper............................................................................................................. 55
4 Conclusion ......................................................................................................................... 55
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1 Introduction
This tutorial letter contains detailed answers to and feedback on all the assignments for 2021. It
also contains useful comments and details about the examination paper which you will write in
October/November this year. Please read and study this tutorial letter carefully.
2 Detailed answers to and feedback on the assignments

There were three assignments for 2021. Assignment 01 and Assignment 02 were compulsory,
while Assignment 03 was for self-assessment purposes. We provide detailed answers to and
feedback on each assignment. Please let us know if you have any questions or queries about
these answers, or one answer in particular.
References to the prescribed book are included, and we encourage you to make use of them to
sharpen your knowledge and understanding of that part of the syllabus. We do our best to
explain each answer as clearly and in as much detail as possible. We trust that you will make
efficient use of these answers when preparing for the examination.
2.1 Answers to Assignment 01
Assignment 01 consisted of 20 multiple-choice questions, which covered topic 1 and topic 2

(learning units 1 to 6) in your study guide. You had to select the correct option from five
alternatives. All the questions were of equal value and counted one mark each.
Question 1
Which of the following statements are correct?
a) A user-based definition of quality means that if the customer is satisfied, the product has
good quality.
b) Serviceability and tangibles are dimensions of service quality.
c) Supply chain management grew out of the value chain. The value chain includes inbound
logistics, core processes and outbound logistics.
d) The trend “customer relationship management” means that marketing is directed at
improving communication between the customer and the supplier.
e) Statistical process control is an engineering-related contribution to quality management.
1 c, d
2 a, b, c
3 a, c, e
4 b
5 a, c
See chapter 1; pages 4, 5, 7, 9 and 12 in the prescribed book.
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Option 3 is correct because statements (a), (c) and (e) are all correct.
Statement (b) is incorrect because serviceability is a dimension of product quality, not service
quality. Other dimensions of service quality include service reliability, responsiveness,
assurance, empathy, availability, professionalism, timeliness, completeness and pleasantness.
Statement (d) is also incorrect because “relationship management” means attention is directed
at satisfying customers and delivering value to customers. More firms are focusing on
relationship management because satisfied customers will generate more sales and profit.
Question 2
Which one of the following is one of Garvin's eight quality dimensions ?
1 Leadership
2 TQM
3 Conformance
4 Cost of quality
5 Continuous improvement
See chapter 1; pages 3-4 in the prescribed book.
Option 3 is correct, as Garvin’s eight quality dimensions are performance, features, reliability,
conformance, aesthetics, durability, serviceability and perceived quality.
Question 3
Which of the following terms refers to the efficiency with which a product achieves its intended
purpose?
1 Serviceability
2 Features
3 Reliability
4 Performance
5 Conformance
Based on his five definitions of quality, Garvin developed a list of eight quality dimensions. See
Table 1-1 on p 4 of the prescribed book. One of these quality dimensions is performance, which
refers to the efficiency with which a product achieves its intended purpose.
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Question 4
Which two of the following statements are correct?
a) Quality control refers to activities associated with guaranteeing the quality of a product or
service.
b) Although Deming is best known for his emphasis on managing a system for improving
quality, his thinking was based on teamwork and leadership for continual improvement.
c) Juran identified three basic processes that are essential to manage in order to improve
quality. The three aspects of Juran’s trilogy are planning, control and evaluation.
d) There are a variety of mechanisms firms use in globalising, of which partnering is one.
e) The task environment of a company has to do with the operating structure that it
encounters when globalising.
1 b, c
2 a, b
3 d, e
4 c, d
5 b, d
See chapter 1; pages 16-17 and chapter 2; pages 28, 32, 50-51 in the prescribed
book.
Option 3 is correct because statements (d) and (e) are both correct.
Option (a) is incorrect because it is not quality control, but rather quality assurance that refers to
activities associated with guaranteeing the quality of a product or service.
Option (b) is incorrect because although Deming is best known for his emphasis on managing a
system for improving quality, his thinking was based on the use of statistics for continual
improvement.
Option (c) is also incorrect because the three aspects of Juran’s trilogy are planning, control and
improvement – not evaluation.
Question 5
Deming believed that poor quality resulted from which of the following causes?
1 Poor human resource management

2 Poor management of the system for continual improvement
3 Consumer complacency
4 Poor engineering and design
5 A lack of commitment on the part of management
See chapter 2; page 29 in the prescribed book.

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Option 2 is correct. Although this option might now seem obvious, it was a revelation to
managers at the time when Deming taught it.
Question 6
Which of the following points for management devised by Deming involves the management
committing resources to ensure that a quality job is completed?
1 Eliminate work standards

2 Create constancy of purpose
3 Improve leadership
4 Adopt a new philosophy
5 Constantly improve the system
The 14 points for management, as set out by Deming, represent various key principles, which
serve as the basis for quality management in many organisations. One of Deming’s points is to
create constancy of purpose toward improvement of product and service, with the aim to
become competitive, stay in business, and provide jobs. This means that management commits
resources so that a quality job is completed.
Question 7
Choose which of the following statements refer to the building blocks for quality improvement.
(a) People form part of the core of any company.

(b) Lifelong learning is an important attribute of employees.
(c) The quality system needs to be validated.
(d) Financial resources provide the infrastructure and services that customers want.
(e) Quality audits need to be performed on a regular basis.
1 a, b, d
2 a, b, c
3 c, d
4 c, d, e
5 d, e
See chapter 15; pages 403 to 406 in the prescribed book.
A quality system depends on the interactions of many variables (see the quality system model,
Figure 15-1, on page 403 of the prescribed book). Quality improvement is definitely not a stand-
alone discipline. The building blocks are like parts that fit together to create a quality system.
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Building block 1: People. People represent the core of a company’s capabilities. They provide
intellect, empathy and ability to provide outstanding customer service. Employees must
understand that they are integral to the quality system. Corporate restructuring and
reengineering can have a negative influence on employees. Quality improvement should be
associated with improved morale and confidence among employees.
Building block 2: Organisational learning and knowledge. Knowledge is the capital that
fuels outstanding quality results. Lifelong learning is a key attribute of employees and is required
for consistency in operations, approaches and customer contact.
Building block 3: Culture. Culture refers to the norms and beliefs that lead to decision-making
patterns and actions in the organisation. Some of the key aspects of culture are attitude towards
change, the presence or absence of fear, degree of openness, fairness, trust and employee
behaviour at all levels. A good quality culture is when decision making is open, information is
available to everyone and risks are rewarded.
Building block 4: Closeness to customers. This refers to the firm’s understanding of

customers’ needs and wants. Customer closeness creates loyalty and is especially important in
services.
Building block 5: Information and finance. Information systems provide the core of the
support system for satisfying the customer. Financial resources are needed to provide the
infrastructure and services to customers.
So we see that Statements a, b and d refer to the building blocks for quality improvement. Note
that statements c and e refer to quality audits, which forms part of the validation of the quality
system.
Question 8
Which of the following is the type of environment that changes when firms locate themselves
near to or far away from natural resources?
1 Economic
2 Task
3 Physical
4 Global
5 Social
Option 3 is correct. For example, semiconductor firms that require large amounts of water will
probably not locate to Saudi Arabia; however, they might relocate to one of the Asian countries
in order to be close to ready supplies of water and expanding markets.
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Question 9
Which one of the following is an example of a strategic content variable?
1 TQM
2 Middle management
3 Quality costs
4 Production planning
5 Service development
Option 3 is the correct option. The variables in strategic quality planning are time, leadership,
quality costs, generic strategies, order winners and quality as a core competency.
Question 10
a) If a leader is charismatic or charming and is followed by people, he or she is liked. In this

case, the leader has referent power.
b) The PAF paradigm translates quality costs into three broad categories, namely production
costs, appraisal costs and failure costs.
c) The forced-choice model of strategic planning is one of several strategic planning models
that could be adapted to demonstrate integrated quality planning.
d) One reason why the price–quality relationship might be difficult to assess is the increase of
high-quality, low-priced goods over the past decades. It is expected that if this trend
continues, the relationship between price and quality will increase.
e) Good quality management implies good ethics.
1 a, b
2 a, c, e
3 c, d
4 b, c, d
5 c
See chapter 4; pages 85, 88-89, 94-95 and 97-98 in the prescribed book.
Statement (b) is incorrect because the PAF paradigm translates quality costs into three broad
categories, namely prevention (not production) costs, appraisal costs and failure costs.
Prevention costs are costs associated with preventing defects and imperfections; appraisal
costs are costs associated with measuring quality; and failure costs are categorised into two
areas: internal failure costs (online failure) and external failure costs (product failure after the
production process).
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Statement (d) is incorrect because one of the reasons why the price–quality relationship might
be difficult to assess is the increase of high-quality, low-priced goods over the past decades. It
is expected that if this trend continues, the relationship between price and quality will decrease.
Question 11
Calculate the ratio of prevention to failure costs, based on the information provided below.
Failure costs
Defective products R 5,500.00
Engineered scrap R 17,354.00
Non-engineered scrap R 122,567.00
Consumer adjustments R 633,000.00
TOTAL R 778,421.00
Prevention costs
Quality training R 15,500.00
Product redesign R 17,000.00
Process engineering:
* Corporate R 125,745.00
* Plant R 40,000.00
TOTAL R 198,245.00
Appraisal costs
Receiving inspection R 35,600.00
Line 1 inspection R 43,526.00
Line 2 inspection R 55,679.00
Spot checking R 62,000.00
TOTAL R 196,805.00
1 0.3689
2 1.6570
3 0.8912
4 0.2547
5 3.8674
See chapter 4; p. 90-91 in the prescribed book.
The ratio of prevention to failure costs is calculated as follows:
Prevention costs / Failure costs

= R 198,245.00 / R 778,421.00
= 0.2547
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Question 12
a) Internal customers are employees receiving goods or services from within the same firm
and are the ultimate people that must be satisfied by the work done.
b) The first component of a complaint resolution process is contrition. The firm should
apologise for the mistake made and invoke Macy’s mantra that “the customer is always
right”.
c) To be effective, a guarantee should be unconditional, meaningful, understandable,
communicable and painless to invoke.
d) Gap 5 of the SERVQUAL model is the difference between expected service and service
delivery.
e) There are four steps in developing a useful survey: identifying customer requirements,
developing and validating the instrument, implementing the instrument and analysing the
results.
1 a, b
2 c
3 b, c, e
4 c, e
5 b, c
See chapter 5; pages 107, 110-112 and 119 in the prescribed book.
Option 4 is correct because statements (c) and (e) are correct.
Statement (a) is incorrect because it is the external customers who are the ultimate people that
must be satisfied by the work done.
Statement (b) is incorrect because the first component of a complaint resolution process is to
compensate the customer for losses. This may be an easy return policy with no questions
asked.
Statement (d) is also incorrect because Gap 5 of the SERVQUAL model is the gap between
expected service and perceived service. Gap 1 is the gap between the expected service and
the management perceptions of consumer expectations. Gap 2 is the gap between the
translation of perceptions into service quality specifications and management perceptions of
consumer expectations. Gap 3 is the gap between service delivery and the translation of
perceptions into service quality specifications. Gap 4 is the gap between service delivery and
external communications to customers.
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Question 13
Which of the following determinants of service quality is related to trustworthiness, believability,

honesty and having the customer's best interests at heart?
1 Reliability
2 Responsiveness
3 Credibility
4 Competence
5 Courtesy
Reliability involves consistency of performance and dependability. The service is performed

right the first time. It involves, amongst others, keeping records correctly. Responsiveness
concerns the willingness or readiness of employees to provide service. Credibility involves
trustworthiness, believability, honesty, and having the customer's best interests at heart.
Competence means possession of the required skills and knowledge to perform the service.
Courtesy involves politeness, respect, consideration and friendliness of contact personnel.
Question 14
Which of the following steps of Xerox's 10-step benchmarking process helps companies to
prioritise which areas are the first candidates for change and improvement?
1 Plan and conduct the investigation.

2 Determine the current performance gap.
3 Identify who to benchmark.
4 Decide what to benchmark.
5 Develop action plans.
Option 2 is correct. Step 4 of Xerox’s benchmarking process is to determine the current

performance gap. Xerox was an early adopter of benchmarking and has used benchmarking
effectively to improve processes. This process is a formal 10-step process, as indicated in Table
6-3 on page 141 of the prescribed book.
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Question 15
(a) The goal of financial benchmarking is to perform financial analysis and compare the results
in an effort to assess overall competitiveness.
(b) In benchmarking, it is important to understand only the target firm’s key business factors.
(c) Business process benchmarking is based on the concept of 5w2h. It is labelled as such
because a business process benchmarking project should result in the answers to seven
questions: who, what, when, where, why, how and how much.
(d) Benchmarking comprises 10 steps. Recalibrating the benchmark is one of the steps, which
means that benchmarking is a once-off process in the best firms.
(e) Operating results are used as a performance measure to benchmark. These may include
cycle times, waste reduction measures, value-added measures and lead time.
1 a, c
2 a, c, e
3 b
4 b, d, e
5 c, e
See chapter 6; pages 132, 138-139, 141 in the prescribed book.
Statement (b) is incorrect because it is important not only to understand your target firm’s key
business factors (KBFs) but also your own. KBFs are important attributes of a business that
influence its operations and decision making. Examples of KBFs are vision, mission, values,
core capabilities and culture.
Statement (d) is also incorrect because “recalibrate the benchmark” (as one of the 10 steps of
benchmarking) indicates that benchmarking is a continuous process in the best firms. The other
nine steps of the benchmarking process is to decide what to benchmark, identify who to
benchmark, plan to conduct the investigation, determine the current performance gap, project
future performance levels, communicate benchmarking findings and gain acceptance, revise
performance goals, develop action plans and implement specific actions, and monitor progress.
Question 16
(a) One of the differences between services and manufacturing is tangibility. This means that
services cannot be inventoried or carried in stock over long periods of time.
(b) A services blueprint is a flowchart that isolates potential fail points in a process. There are
four steps to developing a service blueprint, namely identify processes, isolate fail points,
establish a time frame, and analyse profits.
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(c) A customer benefits package consists of both intangibles that define the service and
tangibles that make up the service.
(d) Component reliability is defined as the propensity of a part to fail over a given time.
(e) Currently, society demands much more from product designers than just high-quality
products. The move to green manufacturing began in Germany with requirements for
importers to remove packaging materials.
1 a, b, c
2 b, c, d
3 b, d, e
4 c, d, e
5 a, c, e
See chapter 7; pages 170, 175 and chapter 8; pages 182, 194-195 in the
prescribed book.
Option 3 is correct because statements (b), (d) and (e) are correct.
Statement (a) is incorrect because one of the differences between services and manufacturing
is intangibility. This means that services cannot be inventoried or carried in stock over long
periods of time.
Statement (c) is incorrect because a customer benefits package consists of both tangibles that
define the service and intangibles that make up the service.
Question 17
What is the first step in the product development process?
1 Generate product ideas

2 Project customer needs
3 Process technology selection
4 Manufacturing system design
5 Marketing plan design
Product idea generation is the first step. During this step, external and internal resources
brainstorm new concepts. Options 2, 3, 4 and 5 are subsequent steps of product development
design.
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Question 18
Which one of the following is a core activity in the value chain?
1 Sales targets
2 Inbound logistics
3 Quality management
4 Benchmarking
5 Human resource management
See chapter 9A; page 212 in the prescribed book.
Option 2 is correct. The value chain and the core activities that are performed by any company
include inbound logistics, outbound logistics, marketing and sales, and service. Human
resources are not related to the supply chain activities. Also refer to page 244, Figure 9-1, for
the Value Chain Activities framework.
Question 19
Which one of the following is the first step in supplier development?
1 Identify critical suppliers.

2 Identify critical products and services.
3 Identify key projects.
4 Define details of agreement.
5 Meet with supplier top management.
See chapter 9A, pages 218-219 in the prescribed book.
There are seven steps for supplier development. The first step is to identify critical products and
services. This involves identifying strategic products and components. Options 1, 3, 4 and 5 are
subsequent steps in supplier development.
Question 20
Which of the following terms is defined as being a systems-based approach to performance

improvement that leverages opportunities created by upstream and downstream linkages with
suppliers and customers?
1 Customer relationship management

2 Supplier relationship management system
3 Supplier development system
4 Project management
5 Supply chain quality management
See chapter 9A; page 223 in the prescribed book.
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Option 5 is correct. Supply chain quality management (SCQM) is defined as a systems-based

approach to performance improvement that leverages opportunities created by upstream and
downstream linkages with suppliers and customers.
2.2 Answers to Assignment 02
Assignment 02 consisted of 20 multiple-choice questions which covered topic 3 (learning units 7

to 10) in the study guide. You had to choose the correct option from five alternatives. All the
questions were of equal value and counted one mark each.
Question 1
Which of the following statements is correct?
(a) The probability of rejecting a lot of good or acceptable quality is called the producer’s risk.
(b) The probability of accepting a lot of acceptable quality is called the consumer’s risk.
(c) The AQL is the maximum percentage of nonconforming/defective components allowed.
(d) LTPD is the percentage of non-defective components (level of poor quality) historically
experienced from a supplier.
(e) An OC curve is a graphical method to assess the probabilities of acceptance for a shipment,
given the quality of the shipment.
1 a, c
2 a, c, e
3 b, d
4 b, c, d
5 a
See chapter 9B; pages 229-230 in the prescribed book.
Option 2 is correct, since statements (a), (c) and (e) are all correct.
Statement (b) is incorrect, because the consumer’s risk is the probability of accepting a poor
quality lot.
Statement (d) is incorrect, because the LTPD (lot tolerance percent defective) is the percentage
of defective components historically experienced from a supplier.
Question 2
For a sampling plan with N = 200, n = 5 and c = 2, determine the producer’s risk if the
acceptable quality level is 3%, by making use of Figure 9A-3, p 232 of the prescribed book.
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1 0.80
2 0.97
3 0.03
4 0.20
5 0.08
Note that this question is similar to example 9A-1 on p 231 of the prescribed book. It is given
that the acceptable quality level (AQL) is 3%. This means that the lot has 3% defective items
(which is good quality), i.e. a fraction nonconforming of 0.03. Now by using the graph, we see
that the probability of accepting such a lot is 0.8. Therefore, the probability of rejecting this lot is
1 – 0.8 = 0.2. Remember that the producer’s risk is the probability of rejecting a good quality lot.
Hence the producer’s risk is   0.20 .
Question 3
Determine the consumer’s risk for a sampling plan with a sample size of n = 50, c = 1 and LTPD
= 8%, by making use of Table 9A-2 on p 233 of the prescribed book.
1 0.24
2 0.92
3 0.08
4 0.90
5 0.10
Note that this question is similar to example 9A-2 on p 232 of the prescribed book. Remember
that the consumer’s risk is the probability of accepting a poor quality lot. The easiest way to
answer this question is to first construct an OC curve. For this purpose, we set up a table as
follows, using table 9A-2:
n np p = np/n c P(a)
50 0.5 0.01 1 0.93
50 1 0.02 1 0.75
50 2 0.04 1 0.48
50 3 0.06 1 0.20
50 4 0.08 1 0.10
50 5 0.10 1 0.09
The resulting graph looks as follows:
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OC curve (n = 50, c = 1)
1
0.9
0.8
Probability of acceptance P(a)
0.7
0.6
0.5
0.4
0.3
0.2
0.1
0
0.01 0.02 0.04 0.06 0.08 0.1
Proportion nonconforming (p)
From the graph above we can now determine the consumer’s risk associated with an LTPD of
8%, i.e the proportion nonconforming is 0.08 (poor quality). Remember that the consumer’s risk
is the probability of accepting a poor quality lot. According to the graph, the probability of
accepting a lot with a proportion of 0.08 nonconforming items is 0.10. Hence the consumer’s
risk is   0.10 .
Question 4
Consider figure 10.5 on page 244 of the prescribed book. Which of the following statements is
true?
(a) There are six processing steps.

(b) The entire process ends when an action letter is issued.
(c) There are two times when materials enter the process.
(d) There are two decisions to be made.
(e) When a submission is seen as complete, it goes to the front desk for a decision.
1 a, b
2 a, b, d
3 b, c, d
4 c
5 d
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Statement a is true. Each rectangle represents a processing step – the work that is actually
performed. In figure 10.5, we can see that there is six rectangles; hence, the process map
indicates six processing steps.
Statement b is true. The process map indicates that when the second decision (diamond
shape) is “Yes”, an action letter is issued and the process stops there (as shown by the “Stop”
symbol). Note that the “Start/Stop” symbol looks quite similar to the “Processing” symbol, but it
is not as wide.
Statement c is false. When materials, forms or tools enter or leave the process, it is indicated
by a parallelogram:
Since there are no parallelogram symbols in the process map, materials do not enter or leave
the process at all.
Statement d is true. A decision is indicated by a diamond:
Figure 10.5 shows that the process map has two diamond symbols, which means that two
decisions have to be made.
Statement e is false. Have a look at the first decision to be made in this process. When a
submission is seen as complete, a department specialist logs it in and then it goes to the front
desk for a decision.
Question 5
For the following observations, calculate the class width of a histogram.
4 8 14 10
12 9 15 17
10 6 8 11
1 3.25
2 3.00
3 4.25
4 3.58
5 4.00
The class width of a histogram is given by:

range
Class width = ;
k
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where k is the number of classes and the range is the difference between the largest value and
the smallest value:
Range = 17 – 4 = 13
Next we need to calculate the number of classes. The formula for calculating the number of
classes for a histogram is as follows:
k  log n log 2 , where:

n = number of data values
k = the number of classes
Since there are 12 observations in the data set, we have n = 12. Therefore:
k  log 12 log 2
k  1.07918 0.30103
k  3.58
Since k represents the number of classes, it can only be a whole number. Therefore, we choose
k as the next whole number larger than 3.58. Hence k = 4 and the class width is:
range 13
Class width =   3.25 .
k 4
Note that since the observations are all whole numbers, the class width also needs to be a
whole number. Therefore we choose the class width to be the next whole number larger than
3.25. Thus, the class width is 4. Note that choosing the class width to be 3, i.e. the whole
number smaller than 3.25, will cause some of the larger observations to be disregarded when
drawing the histogram.
Question 6
Which one of the following quality tools is used to examine the relationship between variables?
1 Cause-and-effect diagram
2 Pareto chart
3 Scatter diagram
4 Control chart
5 Histogram
Option 3 is correct. The scatter diagram (or scatter plot) is used to examine the relationships
between variables. These relationships are sometimes used to identify indicator variables in
organisations.
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See Figures 10-10 and 10-11 on page 251 of the prescribed book for some examples of scatter
plots. Note the type of relationship it implies. Steps in setting up a scatter plot:
 Determine your X (independent) and Y (dependent) variables.

 Gather process data relating to the variables identified in the first step.
 Plot the data on a two-dimensional plane.
 Observe the plotted data to see whether there is a relationship between the variables.
Also see Example 10.4 on pages 251-252 of your prescribed book. Note the type of relationship
displayed by the scatter plot.
Question 7
Which one of the following quality tools helps employees to not only focus on the symptoms of a
problem?
1 Control chart
2 Cause-and-effect diagram
3 Pareto chart
4 Scatter diagram
5 Histogram
Often quality teams spend too much time on the symptoms, rather than the causes of a
problem. The cause-and-effect diagram, also known as the fishbone diagram or Ishikawa
diagram, is a handy quality tool to help a team to focus on these causes, by moving to lower
levels of abstraction when solving a problem. The fishbone diagram is developed during
brainstorming sessions, during which the following steps are followed (in this order):
1. State the problem in the head of the fish.

2. Identify major causes of the problem. This forms the backbone and ribs.
3. Continue to fill out the diagram, asking “why?” about each cause.
4. View the diagram, identifying core causes.
5. Set goals to address the core causes.
Question 8
Bakealot Bakery monitors customer complaints to improve customer satisfaction. They collected
data on certain problems and compiled the following check sheet:
Type of problem Frequency

Wrong order delivered 10
No loyalty programme(s) 33
Unfriendly personnel 11
Not enough variety on menu 26
Pies, cakes or bread too expensive 20
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What will be the cumulative percentage of the two leftmost bars of a Pareto chart?
1 45%
2 59%
3 60%
4 40%
5 82%
See chapter 10; pages 254, 256-257 in the prescribed book.
First, we need to arrange the problems by frequency, from largest to smallest:
Type of problem Frequency

No loyalty programme(s) 33
Not enough variety on menu 26
Pies, cakes or bread too expensive 20
Unfriendly personnel 11
Wrong order delivered 10
Next, we calculate the percentage for each type of problem. Note that you first have to add up
all the frequencies and then divide each frequency by this total to obtain a percentage.
Type of problem Frequency Percentage

No loyalty programme(s) 33 33/100 = 33%
Not enough variety on menu 26 26/100 = 26%
Pies, cakes or bread too expensive 20 20/100 = 20%
Unfriendly personnel 11 11/100 = 11%
Wrong order delivered 10 10/100 = 10%
Total 100 100%
Now we calculate the cumulative percentages:
Cumulative
Type of problem Frequency Percentage
percentage
No loyalty programme(s) 33 33% 33%
Not enough variety on menu 26 26% 33% + 26% = 59%
Pies, cakes or bread too expensive 20 20% 59% + 20% = 79%
Unfriendly personnel 11 11% 79% + 11% = 90%
Wrong order delivered 10 10% 90% + 10% = 100%
Total 50 100%
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When constructing a Pareto chart, we draw the tallest bar first on the left-hand side, followed by
the next tallest bar to its right and so on. See the figure below.
Pareto chart
35
30 33
25
26
Percentage
20
20
15
10
11 10
5
0
No loyalty Not enough variety Pies, cakes or Unfriendly Wrong order
programme(s) on menu bread too personnel delivered
expensive
Type of problem
From the table and figure above, we can see that the two leftmost bars of the Pareto diagram
represent a cumulative percentage of 33% + 26% = 59%.
Question 9
Fruities & Veggies Market wants to monitor customer complaints, in order to improve customer
satisfaction. The quality specialist collected the following data:
Type of Problem Frequency

A: Wrong label on product 21
B: Product past its expiry date 9
C: Opening hours inconvenient 5
D: Unfriendly teller service 31
E: Vegetables frequently out of stock 14
Which of these types of problems need to be focused on according to a Pareto chart?
1 D, A
2 D, E
3 D, A, E
4 B, C, E
5 A, E
See chapter 10; pages 254, 256-257 in the prescribed book.
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First we need to arrange the problems by frequency, from largest to smallest. Then we calculate
the percentage and cumulative percentage relating to each type of problem:
Cumulative
Type of Problem Frequency Percentage
Percentage
D: Unfriendly teller service 31 (31÷80)×100 = 38.75% 38.75%
A: Wrong label on product 21 (21÷80)×100 = 26.25% 38.75 + 26.25 = 65%
E: Vegetables frequently out of stock 14 (14÷80)×100 = 17.50% 65 + 17.50 = 82.5%
B: Product past its expiry date 9 (9÷80)×100 = 11.25% 82.5 + 11.25 = 93.75%
C: Opening hours inconvenient 5 (5÷80)×100 = 6.25% 93.75 + 6.25 = 100%
Total 80 100
From the table above, we can see that problem types D, A and E are responsible for just over
80% of customer complaints. Hence these are the focus areas according to the Pareto principal,
also known as the 80/20 rule.
Question 10
Which one of the following statements is true about random variation?
1 It occurs with a somewhat consistent amount of dispersion.

2 It can be controlled.
3 An example is when a machine breaks or does not function properly.
4 It results from a shift in a process mean or some unexpected occurrence.
5 It results in a process that is not repeatable.
There are two types of variation that can occur in a process, namely random variation and non-
random variation. The statements all refer to non-random variation, except statement 1, which
refers to random variation. It is important that you are able to distinguish whether a process
exhibits random variation or non-random variation.
Question 11
When analysing a process by using a control chart, what is it called when a point occurs outside
one of the control limits?
1 Erratic behaviour
2 Process drift
3 Natural variation
4 Out-of-control process
5 Process run
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Various signals indicate when a non-random event has occurred in a process. Study Figure 11-
1 on page 291 of the prescribed book. One of these signals is when a data point occurs above
the upper control limit (UCL) or below the lower control limit (LCL). When this situation occurs, it
is referred to as an out-of-control process.
Question 12
Which of the following statements is true of non-random variation?
1 It results from a shift in a process mean or some unexpected occurrence.

2 It is uncontrollable.
3 It is centred on a mean.
4 It occurs with a somewhat consistent amount of dispersion.
5 It results in a process that is repeatable.
There are two types of variation that can occur, namely random and non-random variation. The
statements in this question all refer to random variation, except the first statement, which refers
to non-random variation. Non-random variation occurs due to some event, such as a shift in a
process mean or some unexpected occurrence. Compare figures 11-1 and 11-2 on page 281 of
the prescribed book.
Question 13
When analysing a process using a control chart, what is it called when seven points are all
either increasing or decreasing?
1 Erratic behaviour
2 Non-random event
3 Process drift
4 Process run
5 Natural variation
There are various signals of when a non-random event occurs. Study figure 11-11 on page 291
of the prescribed book. One of these signals is when seven points are all either increasing or
decreasing. When this specific situation occurs, it is referred to as a “process drift”, which
means that either materials or machines are drifting out of alignment.
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Question 14
A quality manager in charge of a coffee filter pack production line needed to monitor the weight
(in grams) of the filter packs being produced. Four packs were sampled every hour throughout
the production day. The table below shows the results.
Sample
Weight (g)
number
1 20.4 20.9 20.5
2 19.9 19.8 20.1
3 20.4 21.0 21.1
4 21.3 22.0 21.2
5 21.2 20.9 19.7
Determine the upper control limit for an x chart based on the range.
1 UCL = 20.693
2 UCL = 19.918
3 UCL = 21.469
4 UCL = 21.401
5 More samples are needed to calculate the control limits.
Now, let us calculate the upper control limit for an x chart by using the range as the measure of
dispersion:
We need to use the formula UCLx  x  A2 R .
Hence, we need the values of x ( the overall average) and R (the average range), as well as the
value of the constant A2. Before we can calculate the values of x and R , we need to determine
the average and range of each sample:
Sample
Weight (mm) Range Average
number
1 20.4 20.9 20.5 0.5 20.600
2 19.9 19.8 20.1 0.3 19.933
3 20.4 21.0 21.1 0.7 20.833
4 21.3 22.0 21.2 0.8 21.500
5 21.2 20.9 19.7 1.5 20.600
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Now we can calculate x and R as follows:
x 
x 20.600  19.933  20.833  21.500  20.600 103.466
  20.6932
k 5 5
R
 R  0.5  0.3  0.7  0.8  1.5  3.8  0.76
k 5 5
Next, we look up the value of A2 in the appendix on page 95 of the study guide. Since there are
three observations in each sample (subgroup), we find that A2 = 1.02. Now we are ready to
calculate the upper control limit for an x chart.
UCLx  x  A2 R
 20.6932  1.02  0.76 
 20.6932  0.7752
 21.4684
(Note that the exact answer is obtained by not rounding off during calculations.)
Question 15
A critical part has the specifications 156.45 ± 0.3 cm. The part is manufactured from a process
with a mean of 156.30 cm and a standard deviation of 0.09 cm. Determine the process
capability.
1 0.56
2 1.67
3 0.67
4 0.44
5 0.58
To determine the process capability, we have to calculate the capability index (Cpk):
Cpk  min Cpu, Cpl , where:
USL  
Cpu  is the upper capability index
3
ˆ
  LSL
Cpl  is the lower capability index
3ˆ
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From the information in the question, we have the following quantities:
  156.30 ; ˆ  0.09 ; USL  156.45  0.3  156.75 ; LSL  156.45  0.3  156.15
Therefore, the capability index is calculated as follows:
USL   156.75  156.30 0.45

Cpu     1.67
3ˆ 3  0.09 0.27
  LSL 156.30  156.15 0.15

Cpl     0.56
3ˆ 3  0.09 0.27
Cpk  min Cpu , Cpl  min 1.67, 0.56   0.56
Question 16
Consider the following scenarios. Rearrange it according to the following types of attributes (in
this order): Sensory, structural, temporal, performance and ethical.
(a) Whether or not a satellite dish provides a signal = Performance attribute

(b) Atmosphere in a restaurant = Sensory attribute
(c) Meeting the due date for assignment submission = Temporal attribute
(d) Empathetic insurance claims administrator = Ethical attribute
(e) Sports suspension package on a new Audi RS4 = Structural attribute
1 d, b, c, e, a
2 a, e, c, d, b
3 a, d, e, b, c
4 c, e, d, a, b
5 b, e, c, a, d
There are five types of attributes, namely:
1. Sensory attributes, which relate to your senses (touch, smell, vision and sound). What
do you smell, see, hear and/or touch?
2. Structural attributes, which are the physical characteristics of a product or service.
3. Temporal attributes, which relate to time, often involve the reliability of delivery.
4. Performance attributes, which relate to whether or not a product/service does what it is
supposed to do.
5. Ethical attributes, which are important to firms. This has to do with honesty, integrity and
transparency.
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So we can see that scenario a refers to a performance attribute, because it has to do with
whether or not a satellite dish performs as it is supposed to – and that is to provide a signal to
watch a channel on your television.
Scenario b refers to a sensory attribute, since it involves your senses. The atmosphere in a
restaurant involves smell, sound and vision.
Scenario c refers to a temporal attribute. You have to submit your assignment before a given
date, hence it relates to time.
Scenario d refers to an ethical attribute, because the insurance claims administrator must
adhere to certain ethical behaviour; it forms part of his/her responsibilities.
Lastly, scenario e refers to a structural attribute. A sports suspension package is part of the
physical characteristics of a car – the same as dark tinted windows would be.
Question 17
A manufacturer of printers checks samples of 40 units for functionality at the conclusion of the
assembly process. The results of eight samples are shown below:
Sample A B C D E F G H
Number of printers discarded 2 1 5 2 0 1 4 3
Which of the samples is out of control?
1 Samples C and G
2 Samples G and H
3 None of the samples is out of control.
4 Samples B, E and F
5 Sample C
We need to calculate the control limits of an appropriate control chart in order to see which
sample falls outside and therefore is out of control. Since we are dealing with a number of
defective products, we use a p chart. (Note that one can also use an np chart.) The upper and
lower control limits of a p chart are as follows:
Lower control limit: LCL  p  3 p 1  p  n
Upper control limit: UCL  p  3 p 1  p  n
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The sample size for each subgroup is n = 40. First, we need to determine the proportion of
defective printers for each sample. This is done by dividing the number of discarded (or
defective) printers by the sample size.
Number discarded 2 1 5 2 0 1 4 3
Proportion 0.05 0.025 0.125 0.05 0 0.025 0.1 0.075
For example, the proportion of defective printers for sample A is 2 ÷ 40 = 0.05.
Next, we calculate the average proportion of defective products:
p
 pi  0.05  0.025  0.125  0.05  0  0.025  0.1  0.075  0.45  0.05625
k 8 8
The upper and lower control limits for a p chart is then determined as follows:
UCL  p  3 p 1  p  n
 0.05625  3 0.056251  0.05625  40
 0.05625  3 0.001327
 0.05625  0.10928
 0.16553
From which, it follows that:
LCL  p  3 p 1  p  n
 0.05625  0.10928
 0.05303
(LCL = 0, since a p chart cannot have a negative lower control limit.)
Going back to our data table, we see that none of the samples have a proportion defective of
higher than 0.16553. Therefore, none of the samples are out of control. Note that since LCL = 0,
none of the samples can have a defective proportion lower than the LCL.
Question 18
A system is composed of three components. Two of the components are connected in series
and have reliabilities of 0.94 and 0.91 respectively. The third component, with reliability 0.89, is
connected in parallel with the first two components. What is the overall reliability of such a
system?
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1 0.855
2 0.145
3 0.984
4 0.016
5 0.761
The system can be represented by a diagram as follows:
A B
Let RA = 0.94, RB = 0.91 and RC = 0.89. We start by first calculating the reliability of the two
components in series:
Rs  RA  RB  0.94  0.91  0.8554
This results in an equivalent system consisting of two components connected in parallel:
Rs
Hence, the overall reliability is given by:
R p  1  1  R s 1  RC 
 1  1  0.8554 1  0.89 
 1  0.1446 0.11
 1  0.015906
 0.984
Note that the final answer is rounded off to three decimal places.
Question 19
What is the reliability of a product with a failure rate of 0.02 per operating hour and a useful life
of 96 hours?
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1 0.920
2 0.149
3 0.853
4 0.147
5 1.920
To calculate the reliability of a product, we use the following formula:
R (t )  e  t ; where
R(t )  reliability of product, a function of t
  failure rate of product
t  the useful life of the product
The product has a failure rate of 0.02 failures per hour and a useful life of 96 hours; therefore,
  0.02 and t  96 .
The reliability of the product can now be calculated as follows:
R  t   e  t
R  96   e 0.0296  e 1.92  0.146607
Hence, the reliability of this product is 0.147 (rounded off to three decimal places).
Question 20
A manufacturer of computer screens checks samples of 20 units for functionality at the

conclusion of the assembly process. The results of 8 samples are shown below:
Number of screens defective 2 1 5 2 6 0 4 3
Which of the following process signals will occur on a p-chart?
1 One or more data points outside the control limits

2 Two data points near the UCL or LCL
3 A sudden change in level
4 Five successive observations above or below the centre line
5 None of the above. The control chart shows normal behaviour.
31
In order to answer the question, we need to draw the p-chart. First we need to calculate the
proportions of defective screens:
Number of screens defective 2 1 5 2 6 0 4 3
Proportion of screens defective 0.10 0.05 0.25 0.10 0.30 0.00 0.20 0.15
Next, we calculate the average proportion of defective screens:
p
pi 0.1  0.05  0.25  0.1  0.3  0  0.2  0.15 1.15
   0.14375
k 8 8
Now the control limits can be determined. Note that the sample size is n=20.
UCL  p  3 p 1  p  n
 0.14375  3 0.14375 1  0.14375  20
 0.14375  3 0.00615
 0.14375  0.23527
 0.379
LCL  p  3 p 1  p  n
 0.14375  3 0.14375 1  0.14375  20
 0.14375  3 0.00615
 0.14375  0.23527
 0.092
(LCL = 0, since a p-chart cannot have a negative lower control limit.)
We are now ready to draw the p-chart. The proportions, as calculated above, is plotted against
its sample number. The resulting chart is shown below. See if you got the same graph. You must
be able to draw a control chart from given data.
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0.40
0.35
Proportion of defective screens
0.30
0.25
0.20
0.15
0.10
0.05
0.00
1 2 3 4 5 6 7 8
Sample number
As can be seen from the p-chart, there is a sudden change in level between the 5th and 6th
samples. The observation for the 5th sample is high above the centre line and the observation
for the 6th sample is far below the centre line. Other than that, no abnormal behaviour is present
in the process.
2.3 Answers to Assignment 03 (self-assessment)
Assignment 03 consisted of essay-type questions and covered all the topics at random. This is
a very important assignment in view of the upcoming examination. Make sure that you
understand each question and answer. Especially pay attention to the questions on statistical
tools and techniques (questions 10 to 16). These questions are more troublesome for students
than the other questions from the theory part of the syllabus.
Question 1
You have been appointed as the director of quality in an organisation that manufactures
executive office furniture. The chairman of the board has requested a presentation on the
following areas of quality:
a) Identify and define the various product quality dimensions and indicate their application to
the product of the company. [16]
33
1. Performance refers to the efficiency with which a product meets its intended purpose, for
example is the filing cabinets designed for the right size files?
2. Features are the bells and whistles that supplement the product’s basic performance, for
example high-gloss varnish, glass top on desks and velvet padded chairs.
3. Reliability is the requirement for the product to perform consistently over its useful life, for
example appropriate tests carried out on the products to last for at least 10 years, metal
handles, stainless steel hinges and steel legs for chairs.
4. Conformance refers to meeting the design specifications. There has to be adequate quality
control to ensure that products are manufactured to specification. For example, the length,
width and colour of desks.
5. Durability is the degree to which a product can tolerate stress and trauma before failing.
For example, chair covers can be plastic coated and desks can have thick glass tops.
6. Serviceability shows how easy it is to repair and maintain a product. For example, can the
chair seats be easily and cheaply replaced if they tear?
7. Aesthetics are features that appeal to taste, feel, sound, look and smell. For example, the
colour of the desk – does one feel like an executive manager, a supervisor, or a student?
8. Perceived quality is based on the customer or user’s opinion. Terms such as “excellent”,
“good”, “satisfactory”, “okay”, “useless”, “rubbish” and “no value” can be used to express
perceived quality.
[8 × 2 = 16 marks]
b) Explain quality assurance and quality control functions, and how they can be implemented.
[8]
Quality assurance
Quality assurance refers to activities associated with guaranteeing the quality of a product or
service. These activities are usually design related, thus the best way to ensure quality is in the
design of products, services and processes. Activities include:
 Failure mode and effective analysis (FMEA)

 Concurrent engineering
 Experimental design
 Process improvement
 Design team formation and management
 Off-line experimentation
 Reliability/Durability product testing
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Quality control
The first sphere is quality control which is embedded in a process to consistently meet
standards. The control process is based on the scientific method, which includes the phases of
analysis, relation and generalisation. The control process involves observing or measuring
actual performance, comparing it with some standard and then taking appropriate remedial
action if there are deviations. Activities include:
 Monitoring process capability and stability

 Measuring process performance
 Reducing process variability
 Optimising processes to nominal measures
 Performing acceptance sampling
 Developing and maintaining control charts
c) The components of a customer relationship management process, as used for customer

turnaround. [12]
1. Complaint resolution
Within this context, there are three types of complaints: regulatory complaints, employee
complaints and customer complaints. However, all complaints must be viewed as opportunities
for improvement. The resolution process includes compensating for losses and contrition. There
should be a complaint and recovery process, including documenting complaints, resolving
complaints, documenting recovery and feedback for system improvement.
2. Feedback
Data is necessary to understand the behaviour, wants and needs of the customer. One of the
methodologies of collecting data is customer feedback. There are two main types of feedback:
feedback to the customer and feedback to the firm as a basis for process improvement.
Customer feedback includes reporting the resolution of the complaint to the customer. This can
be done telephonically, electronically and/or by post. Feedback to the firm should occur
constantly and should result in process improvement.
3. Guarantees
A guarantee takes into account customer rights. It promotes confidence about the purchase of
the product. There are various conditions for a guarantee:
35
 Unconditional: No small print or red tape.
 Meaningful: Customer grievances should be fully addressed and any financial loss
recovered.
 Understandable: The customer must understand the scope of the guarantee and the
procedure for quick resolution.
 Communicable: The phrasing of the guarantee should resonate with the customer.
 Painless to invoke: The customer should not be inconvenienced in any way.
4. Corrective action
Failures should be addressed in such a way that they never happen again. Management should
ensure that there are adequate resources and teams who will ensure that the necessary action
is taken to prevent failure reoccurrence. They should analyse complaints and recommend
improvements to the customer service delivery system. This is referred to as closed-loop
corrective action.
[4 × 3 = 12 marks]
d) Problems that can prevent the success of benchmarking, and how you will overcome it. [8]
1. Difficulty in getting cooperation with the benchmarking partner. To overcome this, there
must be an exchange system – in the sense that you need to offer something in exchange for
what you want from the partner.
2. You might engage with a non-appropriate partner. The predominance of functional

benchmarking with firms in non-competing industries makes it difficult to benchmark these
firms. You have to conduct research and study business literature before selecting a
benchmarking partner.
3. You do not understand your own processes. This becomes a wasted effort if you do not
understand your own processes. Use tools such as business process maps and business
process reengineering before embarking on a benchmarking exercise. This makes it possible
to identify the exact performance measures needed from the target firm.
4. Benchmarking is costly and time consuming. Benchmarking incorporates double barrel

costs. Costs and time costs are actually doubled because it incorporates costs for the
beneficiary and partner. Costs include time for planning, travel and implementation. To keep
costs to a minimum, the plans for benchmarking and implementation need to be well
structured and managed. [4 × 2 = 8 marks]
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Question 2
Apply Deming’s 14 points to a manufacturing company or service provider of your choice by

explaining how each point will further benefit the organisation. [14]
1. Create constancy of purpose toward improvement of product and service with the aim
of becoming competitive, staying in business and providing jobs
This means that organisations exist not just to make money or generate profits. They exist to
serve their customers and employees. The management of these organisations needs to
ensure that there are strategic plans with clear visions and missions and investment in
innovation, training and research.
2. Adopt a new philosophy – We are in a new economic age
Traditional methods of management create mistrust, fear and anxiety. The new philosophy
focuses on a customer-centred approach based on mutual cooperation between the
management and the workforce who are always engaged in continual improvement.
3. Cease dependence on mass inspection to improve quality
Routine inspection activities acknowledge defects but do not add value to the product.
Instead, it encourages defects as an inspector is viewed as the person who will detect and
filter out defects. This methodology leads to an increase in cost and a decrease in
productivity. Eliminate the need for inspection on a mass basis by building quality in the first
place.
Deming suggests instilling quality at the source. This means that all workers are responsible
for their own work and perform needed inspections at each stage of the process to maintain
process control; quality is not only the responsibility of the quality department.
4. End the practice of awarding business on the basis of price tag alone
The purchasing department is responsible for the procurement of raw materials and
components for the manufacture of products and services. Traditionally, purchasing
decisions were based on the price and not on quality. This will result in defective products if
the raw materials are inferior in quality.
Deming suggests that costs be minimised, moving towards a single supplier for an item and
building loyalty and trust in a long-term relationship. There is a misconception that the
approach of having many suppliers will result in competition that will improve quality and
decrease cost. In reality, having many suppliers overemphasises cost and an increase in
variability.
37
5. Improve constantly and forever the system of production and service, to improve
quality and productivity, and thus constantly reduce cost
Continual improvements should be encouraged in small increments rather than in leaps and
bounds. The big step approach normally leads to expensive innovations and technology that
may eventually demodulate improvements. This focuses on the management of the systems
of production. The system of production are product design, process design, training, tools,
machines, process flows, and a host of other variables that affect the system of production
and service.
In the final analysis, management is responsible for most of the system design elements as
it is they who have the authority and the budget to implement systems. This means that
workers can only be held responsible for their inputs into the system. The poor performance
of the system is often due to the poor performance of management.
6. Institute training on the job
It is essential for people to have the necessary training and knowledge to perform their work.
Training will also improve the productivity and morale of the workforce by showing them that
the company is interested in helping them to invest in their future. Deming stresses that
training, although a necessary condition for improvement, is not sufficient to guarantee
successful implementation of quality management.
7. Improve leadership
The aim of supervision should be to help people, machines and gadgets to do a better job.
All quality experts agree that leadership is key to improving quality. For wide-ranging quality
improvements to occur, upper management must be involved. It is upper management who
has the money and authority to oversee the improvement of quality.
8. Drive out fear, so that everyone may work effectively for the company
Deming referred to those employees who were fearful to change or admit that problems
exist. At times, employees who raise problems and request changes are considered
troublemakers. Some employees fear making or suggesting improvements because they are
not acknowledged and end up ignored. Employees also fear asking for improvements as the
improvements might result in them losing their jobs. Many Japanese firms overcome these
fears by offering lifetime employment.
9. Break down barriers between departments
Deming suggests that people in research, design, sales and production must work as a team
to see problems of production. The focus should be that the organisation works collectively
to meet the needs of customers by improving processes. Teamwork is an important means
of attaining the organisation’s goals and objectives.
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10. Eliminate slogans, exhortations and targets for the workforce that require zero
defects and new levels of productivity
Deming believed that such exhortations only create adversarial relationships, as most of the
causes of bad quality and low productivity belong to the system and lie beyond the power of
the workforce. His view was that such exhortations “to get it right the first time” and “zero
defects forever” can have the opposite of the intended effect.
By pressuring employees to achieve higher levels of quality and productivity, management

place the onus for improvement on the employees. If the structures and resources are not in
place to assist employees, they can become frustrated and discouraged and this may lower
their performance even further.
11. Eliminate work standards on the factory floor
Deming did not like the promotion of work standards and work measurements. His view was
that management should instil better leadership instead of standards. Once standards are
achieved, continuous improvement stops. In other words, there is a focus on results and not
on processes and this does not promote long-term behaviour. Managers need to understand
the system and the variations within the system, and seek to reduce it in the long term.
12. Remove barriers that rob workers of their right to pride in the quality of their work
The responsibility of supervisors must be changed from managing numbers to quality. Many
casual workers are hired on an hour to hour basis just to perform physical tasks. These
workers suffer from low morale and low commitment to the organisation. Unskilled managers
add to this problem by reinforcing that employees cannot be trusted with decisions and self-
determination. Deming was of the view that performance appraisals were destructive to pride
of workmanship. Performance appraisals do not promote teamwork but rather competition
between workers for limited resources. Objectives are driven by numbers, which normally
focuses on short-term results and not on the customers.
13. Institute a vigorous programme of education and self-improvement
Deming believed in a learning organisation, which requires a structure that reinforces and
rewards learning. The organisation must create an environment in which employees strive to
achieve their best by attaining better skills and better education. This in turn will motivate the
worker.
14. Put everybody in the company to work in order to accomplish transformation
The transformation process is everyone’s job. Hence, a quality management system must
include all the workers in an organisation.
39
Question 3
What is the relationship between quality and ethics? [5]
Quality is not only good business; it is also good ethics. It is unethical to knowingly ship
defective products to a customer. Reliable products and low defect rates reflect an ethical
approach and management's care for customers.
Companies that focus on their customers often develop a set of ethics that includes valuing
employees. This is reflected in education, training, health, wellness and compensation
programmes that show empathy for the employees. Increasingly, environmental friendliness is
seen as an ethical concern.
Question 4
By globalising, organisations considerably change the physical environment, the task

environment and the social environment. Distinguish between the task environment and the
social environment of a firm. [6]
The task environment of the firm has to do with the operating structure that the firm encounters
when globalising. In contrast, the social environment of globalising corporations refers to cultural
factors such as language, business customs, customer preferences and patterns of
communication.
Question 5
The head of the purchasing department at Gauteng Electronics asked you to assist them with
“supplier development”. He heard this term recently at a conference that he attended but is not
sure what it means. Write a short report on the meaning of the term “supplier development” as
well as on the steps of this process. [20]
See chapter 9; page 218-219 in the prescribed book.
Supplier development has to do with activities that the buyer undertakes to improve the
performance of suppliers. The seven steps of supplier development are:
1. Identify critical products and services. This involves strategic products and components
(those that are difficult to obtain, high cost or high volume).
2. Identify critical suppliers. These may be suppliers who provide strategic components but
do not meet quality objectives or schedules.
3. Form cross-functional teams. The buyer forms a cross-functional team to work with the
supplier.
4. Meet with supplier top management to discuss strategic alignment, performance
measures and expectations.
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MNO2602/201
5. Identify key projects. Projects are selected using criteria such as the ROI, feasibility and
impact.
6. Define details of agreement. This involves cost, commitments of resources,
accountability, deliverables and so on.
7. Monitor status and modify strategies. Monitor progress and advise on strategies as
needed.
Question 6
A customer is the receiver of goods or services. Differentiate between internal and external
customers. [4]
Internal customers are employees who receive goods or services within the same firm. For
example, management information system (MIS) technicians and programmers view the users
within their company as internal customers.
In contrast, external customers or end users are the bill-paying receivers of a company's work.
A person who enters a restaurant and purchases a meal is an external customer.
Question 7
Why do many benchmarking professionals believe that business process benchmarking is the
most important type of benchmarking? [5]
Most students will agree with this statement. The example that is provided in the chapter to
support this position is as follows: Suppose that you do a comparison of your customer service
with that of the competitor. You find out that your competitor is using a standard survey
instrument to gauge customer satisfaction. You then administer the survey to your customers
and find out that on a five-point scale, your company rates 4.3 and your competitor rates 4.7.
What do you do with this information? The fact that your score differs from your competitor’s
tells you nothing about how your competitor is achieving the higher score. To understand how
your competitor has achieved the score, business process benchmarking is necessary.
Business process benchmarking is based on the concept of 5w2h developed by Alan Robinson.
A business process benchmarking project should result in the answers to seven questions.
5w2h refers to the 5Ws (who, what, when, where and why) and the 2hs (how and how much).
The 5w2h concept is a good starting point because it focuses the participants in the
benchmarking process on the “nuts and bolts” of what is being done. If the initiator organisation
can answer the 5w2h questions at the end of a benchmarking process, information will be in
place that could help it to improve customer satisfaction.
41
Question 8
Differentiate between voluntary and involuntary services, with examples. [4]
Voluntary services are services that we actively seek out and employ of our own accord.
Generally, we research a voluntary service (such as a gas station, a restaurant or a hotel) and
have certain expectations when we engage its services.
A typical example of involuntary service is a prison. Others ar hospitals, SARS, police, the fire
department and other services that you do not choose. If you have the chance to engage this
type of service at some point, you likely will have vague expectations about the experience.
Question 9
The value chain is a tool that disaggregates an organisation into its core activities to help
reduce costs and identify sources of competitiveness. From a quality perspective, explain the
concept "chain of customers". [4]
From a quality perspective, an interesting variation of the value chain is the concept "chain of
customers". If we look at the activities along the value chain sequentially, we see that the links
in the value chain are really people performing different functions.
The chain of customers is revealed when you view the step in the chain after you as your own
customer. This means that if you work at Workstation 4 in a process at the core of the value
chain, you will make sure that the work that you do is absolutely impeccable before you release
it to your "customer" at Workstation 5.
This chain extends from raw materials through supplier firms to the producing firm, with the final
link in the chain being the ultimate consumer of the product. The notion is that if each of us
along a chain works to satisfy our own customer, the final customer will be very satisfied and
our products and services will be free of defects and mistakes.
Question 10
The following dataset contains the number of defective products produced by a sample of 18
machines at Ntini factory:
14 21 44 26 29 32
55 19 48 46 45 22
25 14 21 30 45 27
Develop a histogram to graphically summarise the data. [9]

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MNO2602/201
First, we have to determine the number of classes. We use the formula k  log n log 2 . Since
there are 18 observations, we have n = 18. Therefore:
k  log 18  log 2

k  1.2553 0.3010
k  4.17
We take k = 5 (the next integer larger than 4.17).

Now, with 5 classes, the class width is:
Range 55  14 41
   8.2
k 5 5
Since the dataset consists of only whole numbers, we choose the class width as 9 (which is the
next whole number larger than 8.2). The frequency distribution is as follows:
Class Frequency
14–22 6
23–31 5
32–40 1
41–49 5
50–58 1
From the frequency table above, we can now draw the histogram:
5
Frequency
0
14 22 31 40 49 58
Number of defective products
43
Question 11
Consider the following problem of a particular bank. After several brainstorming sessions held
by the Financial Quality Management Committee, the problem was defined as incomplete ATM
transactions. Data on the causes of the incomplete ATM transactions were collected and the
results are shown in the table below:
Cause Frequency
ATM malfunctions 32
ATM out of cash 28
Invalid amount requested 23
Lack of funds in account 19
Magnetic strips unreadable 234
Warped card jammed 365
Wrong pin 23
Perform a Pareto analysis to assist the Financial Quality Management Committee in solving this
problem. [7]
See Study unit 10 on pages 254, 256-257 in the prescribed book.
First, order the causes according to their frequency, from largest to smallest, and then construct
a frequency table containing the frequencies, percentages and cumulative percentages.
Cumulative
Cause Description Frequency Percentage
percentage
A Warped card jammed 365 50.4 50.4
B Magnetic strips unreadable 234 32.3 82.7
C ATM malfunctions 32 4.4 87.1
D ATM out of cash 28 3.9 91.0
E Wrong pin 23 3.2 94.2
F Invalid amount requested 23 3.2 97.4
G Lack of funds in account 19 2.6 100.0
Total 724 100
Now we are ready to draw a Pareto diagram. Here is the completed diagram:
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MNO2602/201
100.0
90.0
80.0
70.0
60.0
Percentage
50.0
50.4
40.0
30.0 32.3
20.0
10.0
0.0
Cause A Cause B Cause C Cause D Cause E Cause F Cause G
Note that we start with the cause with the highest frequency (that is, “warped card jammed”).
This will be the leftmost bar of the graph. Then we draw the bar representing the cause with the
second highest frequency, namely “magnetic strips unreadable”. We continue until all of the
above causes have been “converted” to bars, and this will complete the Pareto diagram.
We can see from the Pareto diagram that about 83% of the problems are created by only two
(roughly 29%) of the causes. This is exactly what the Pareto principle (80/20 rule) is all about –
more often than not, it is found that if 20% of the major causes of a quality problem can be
eliminated, 80% of the problem will be solved.
Question 12
The branch manager of a bank wants to reduce the customer waiting time for teller service on
weekdays from 12:00 to 13:00. A subgroup of four customers is selected (one at each 15
minute interval during the one-hour time period) and the time (in minutes) is measured from
when each customer enters the line to when he/she is served by the teller assistant.
The branch manager has asked you to analyse the waiting time. After consulting the head of
the Quality Control Department, you decide to use statistical process control. In order to assist
the branch manager, you have to answer the following questions based on the data below:
45
Day Time (min)
1 7.2 8.4 7.9 4.9
2 5.6 8.7 3.3 4.2
3 5.5 7.3 3.2 6.0
4 4.4 8.0 5.4 7.4
5 9.7 4.6 4.8 5.8
6 8.3 8.9 9.1 6.2
7 4.7 6.6 5.3 5.8
8 8.8 5.5 8.4 6.9
9 5.7 4.7 4.1 4.6
10 3.7 4.0 3.0 5.2
11 2.6 3.9 5.2 4.8
12 4.6 2.7 6.3 3.4
(a) Construct an x chart based on the range. [12]

(b) State whether or not the process is in control. Motivate your answer. [2]
(a) To develop an x chart based on the range, we first need to calculate the average
(mean) as well as the range for each subgroup.
Day Time (min) R x

1 7.2 8.4 7.9 4.9 3.5 7.100
2 5.6 8.7 3.3 4.2 5.4 5.450
3 5.5 7.3 3.2 6.0 4.1 5.500
4 4.4 8.0 5.4 7.4 3.6 6.300
5 9.7 4.6 4.8 5.8 5.1 6.225
6 8.3 8.9 9.1 6.2 2.9 8.125
7 4.7 6.6 5.3 5.8 1.9 5.600
8 8.8 5.5 8.4 6.9 3.3 7.400
9 5.7 4.7 4.1 4.6 1.6 4.775
10 3.7 4.0 3.0 5.2 2.2 3.975
11 2.6 3.9 5.2 4.8 2.6 4.125
12 4.6 2.7 6.3 3.4 3.6 4.250
Total 39.8 68.825
Next, we compute the overall average (grand mean) and the average range:
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MNO2602/201
x 
x 68.825
 5.735
k 12
R i 
R 39.8
 3.317
k 12
Before we can calculate the control limits, we need to look up the value of A2 (the factor
associated with an x chart when it is based on the range). From the appendix on page 95 of the
study guide, we find that A2 = 0.73 for a subgroup of size n = 4.
The control limits for the centre line that we have are then calculated as follows:
CLx  x  5.735
For the upper control limit, we have:
UCLx  x  A2 R
 5.735  0.73  3.317 
 5.735  2.421
 8.156
The lower control limit is:
LCLx  x  A2 R
 5.735  0.73  3.317 
 5.735  2.421
 3.314
Finally, we are ready to draw the x chart, based on the range:
47
8.5
8.0
7.5
7.0
Average time (min)
6.5
6.0
5.5
5.0
4.5
4.0
3.5
3.0
2.5
1 2 3 4 5 6 7 8 9 10 11 12
Day
(b) There is evidence of a possible non-random situation. There is a sudden change in level of
more than three standard deviations, occurring between days 6 and 7 and again between
days 8 and 9.
Question 13
The specifications for a bicycle derailleur are 6 cm ± 0.01 cm. The current process produces
derailleurs with a mean of 6.002 cm and a standard deviation of 0.004 cm. Is the process
capable? Motivate your answer. [8]
To determine whether a process is capable, we need to calculate the capability index.
The upper capability index is:
USL   6.01  6.002

Cpu    0.67
3ˆ 3  0.004 
The lower capability index is:
  LSL 6.002  5.99

Cpl    1.00
3ˆ 3  0.004 
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MNO2602/201
The capability index is the smaller of the upper and lower capability indexes:
Cpk  min Cpu, Cpl  min 0.67,1.00  0.67
We see that the capability index is 0.67, which is much less than 1.25, and therefore we
conclude that the process is not capable of producing bicycle derailleurs that meet the
specification limits.
Question 14
A manufacturer of ceramic tiles subjects their tiles to several quality checks. Tiles found to have
surface deformities or failing to meet size specifications are considered defective tiles. The
table below presents the number of defective tiles in 12 samples of 50 tiles each:
Sample number 1 2 3 4 5 6 7 8 9 10 11 12
Number of defective tiles 7 5 4 3 3 6 2 5 8 4 6 1
(a) Construct a p chart for this manufacturing process. [11]

(b) State whether or not the process is in control. Motivate your answer. [2]
(a) We first need to calculate the proportion of defective tiles for each subgroup:
Defective
Sample Proportion
tiles
1 7 7/50 = 0.14
2 5 2/50 = 0.10
3 4 0.08
4 3 0.06
5 3 0.06
6 6 0.12
7 2 0.04
8 5 0.10
9 8 0.16
10 4 0.08
11 6 0.12
12 1 0.02
Total: 54 1.08
Next, we compute the overall average proportion of defective tiles:
p
p i

1.08
 0.09
k 12
49
Note that this is also the centre line of the p chart.
The upper and lower control limits for a p chart is then determined as follows:
UCLp  p  3 p 1  p  n
 0.09  3 0.09 1  0.09  50
 0.09  3 0.001638
 0.211
LCLp  p  3 p 1  p  n
 0.09  3 0.09 1  0.09  50
 0.09  3 0.001638
 0.031
(LCL = 0, since the lower control limit of a p chart can never be smaller than zero.)
The completed p chart are as follows:
p chart for proportion of defective tiles

0.225
0.200
Proportion of defective tiles
0.175
0.150
0.125
0.100
0.075
0.050
0.025
0.000
1 2 3 4 5 6 7 8 9 10 11 12
Sample number
(b) There is no clear evidence of a non-random event; therefore, we can conclude that the
process is in control.
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MNO2602/201
Question 15
A system consists of six components, connected as in the figure below:
F D
C
B
The reliability of each component in the system is as follows:
Component A: R A  0.87 Component B: RB  0.95

Component C: Rc  0.85 Component D: RD  0.92
Component E: RE  0.83 Component F: RF  0.90
Determine the reliability of the system. [8]
First, notice that Components F and D are connected in series:
Rs1   RF  RD    0.90  0.92   0.828
Now we have the following equivalent system:
s1
C
B
Next, we see that Components C and E are connected in parallel:

R p1  1  1  RC  1  RE   1  1  0.85 1  0.83  0.9745
The system can now be further simplified as follows:
51
A
s1
B p1
From the figure above, notice that Components B and p1 are connected in series:
Rs 2   RB   R p1    0.95  0.9745   0.925775
Now we have an equivalent system as follows:
s1
s2
Components A and s2 are now connected in parallel:
R p 2  1  1  RA  1  Rs 2   1  1  0.87 1  0.925775   0.99035075
Lastly, the system is simplified to only two components connected in series:
p2 s1
Hence, the reliability of the system is:
R   R p 2   Rs1    0.99035075  0.828  0.82
Question 16
(a) Determine the reliability of a product with a failure rate of 0.002 and a useful operating life
of 150 hours. [3]
(b) Suppose a product is designed to operate for 210 hours with a 0.02 probability of failure.
i) How many failures per hour are incurred by this product? [4]
ii) What is the MTTF for this product? [2]
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MNO2602/201
(a) The reliability is calculated by using the formula R (t )  e  t . The failure rate of the product
is   0.002 and the product’s useful life is t  150 . Therefore, the reliability is:
R(t )  e  t
R(150)  e 0.002150  e 0.3  0.74
Hence, the reliability of the product is 0.74 failures per hour or 74 failures every 100 hours.
(b) The product’s useful life is t  210 , with a reliability of R (t )  0.02 .

i) In this case, we need to calculate the failure rate (  ). We again use the reliability
function. Therefore, we have:
R (t )  e  t
0.02  e 210 
ln  0.02   210
ln  0.02 
  0.019
210
The product incurs 0.019 failures per hour or approximately 19 failures every 1000 hours.
1 1
ii) The mean time to failure is   52.63 hours.
 0.019
Question 17
There are regions in which the three spheres of quality overlap. Briefly discuss some of the
overlaps between quality management, quality assurance and quality control, as well as why
they are important. [15]
See chapter 1; pages 16-17, chapter 15; pages 406-407 in the prescribed book.
None of these three spheres are independent. Chapter 1 contains a simpler view of the three
spheres of quality (see Figure 1-7 on page 17 of the prescribed book). Quality management can
be conceptualised by means of the three spheres of quality, namely quality control, quality
assurance and quality management.
It is important to note that many quality-related activities can occur simultaneously within the
“three spheres of quality” framework. Since these activities and tasks overlap, there need to be
good communication between the key role-players performing the different activities.
53
The first sphere is quality control. The control process is based on the scientific method and
this includes the three phases of analysis, relation and generalisation. Activities relating to
quality control include:
 Monitoring process capability and stability

 Measuring process performance
 Reducing process variability
 Optimising processes to nominal measures
 Performing acceptance sampling
 Developing and maintaining control charts
Quality assurance is associated with guaranteeing the quality of a service or product. This
view of quality states that quality control is reactive rather than proactive – quality problems are
detected after they occur. Quality assurance activities include:
 Failure mode and effects analysis

 Concurrent engineering
 Process improvements
 Design team formation and management
 Offline experimentation
 Reliability/Durability product testing
Quality management is the management process that oversees and ties together the control
and assurance activities. This integrative view of quality supports the idea that quality is not only
the responsibility of quality managers, but of the whole management team. A number of
supervisors, managers and employees are involved in activities such as:
 Planning for quality improvement

 Creating a quality organisational culture
 Providing leadership and support
 Providing training and retraining
 Designing an organisational system that reinforces quality ideals
 Providing employee recognition
 Facilitating organisational communication
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MNO2602/201
3 Examination paper
We do not provide a scope of the examination paper, because it will cover the whole syllabus.
We do, however, encourage you to spend some extra time on the statistical part of the syllabus
(learning units 7-10). You need to practise doing the calculations and drawing a chart or graph.
Also, work through Assignment 03 when you prepare for the examination.
If you did well in Assignment 01 and 02, and worked through Assignment 03, as well as the
activities and examples in the study guide, you should not have any problems in the
examination. To summarise, when preparing for the examination, do the following:
1. Work through the examples in the study guide.

2. Do the activities in the study guide. The solution to each activity is provided.
3. Revise and work through Assignment 01 and Assignment 02, using this tutorial letter.
4. Work through Assignment 03, especially the statistical tools and techniques.
5. Practise writing an examination paper against the clock (say about two hours).
It is best if you follow this order. Please contact your lecturer if you have any queries.
The format of the examination paper will be as follows:
 It is an open-book, online examination, i.e. you may use your study material and you
would need an internet connection to download the paper and upload your answer file.
 The examination paper will consist of two sections, for a total of 70 marks.
 The duration of the paper is 4 hours. Please use your time wisely.
 Section A will contain 10 multiple choice questions, for a subtotal of 10 marks.
 Section B will consist of three essay-type questions. Each question will have a number of
sub questions totalling 30 marks.
 You need to select and answer any two questions from Section B.
 The total for Section A is 10 marks and the total for Section B is 60 marks.
Your examination mark will count 80% and your year mark counts 20% towards your final mark.
4 Conclusion
We trust that you have enjoyed studying this module in quality management and techniques.
Hopefully this valuable new knowledge will enable you to apply most of the concepts, principles
and techniques in your work environment with great success.
Good luck for the examination!
©
UNISA 2021
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MNO2602/201/3/2021

Tutorial Letter 201/3/2021

Quality Management and Techniques

Department of Operations Management

2 Detailed answers to and feedback on the assignments

2.1 Answers to Assignment 01

Assignment 01 consisted of 20 multiple-choice questions, which covered topic 1 and topic 2

Which of the following statements are correct?

See chapter 1; pages 4, 5, 7, 9 and 12 in the prescribed book.

Which one of the following is one of Garvin's eight quality dimensions ?

See chapter 1; pages 3-4 in the prescribed book.

See chapter 1; pages 3-4 in the prescribed book.

Which two of the following statements are correct?

1 Poor human resource management

See chapter 2; page 29 in the prescribed book.

1 Eliminate work standards

See chapter 2; page 29 in the prescribed book.

(a) People form part of the core of any company.

See chapter 15; pages 403 to 406 in the prescribed book.

Building block 4: Closeness to customers. This refers to the firm’s understanding of

See chapter 3; page 51 in the prescribed book.

Which one of the following is an example of a strategic content variable?

See chapter 4; page 82 in the prescribed book.

Which of the following statements are correct?

a) If a leader is charismatic or charming and is followed by people, he or she is liked. In this

See chapter 4; p. 90-91 in the prescribed book.

The ratio of prevention to failure costs is calculated as follows:

Prevention costs / Failure costs

Which of the following statements are correct?

Option 4 is correct because statements (c) and (e) are correct.

Which of the following determinants of service quality is related to trustworthiness, believability,

See chapter 5; page 112 in the prescribed book.

Reliability involves consistency of performance and dependability. The service is performed

1 Plan and conduct the investigation.

See chapter 6; page 141 in the prescribed book.

Option 2 is correct. Step 4 of Xerox’s benchmarking process is to determine the current

Which of the following statements are correct?

See chapter 6; pages 132, 138-139, 141 in the prescribed book.

Which of the following statements are correct?

What is the first step in the product development process?

1 Generate product ideas

See chapter 7; page 154 in the prescribed book.

Which one of the following is a core activity in the value chain?

See chapter 9A; page 212 in the prescribed book.

Which one of the following is the first step in supplier development?

1 Identify critical suppliers.

See chapter 9A, pages 218-219 in the prescribed book.

Which of the following terms is defined as being a systems-based approach to performance

1 Customer relationship management

See chapter 9A; page 223 in the prescribed book.

Option 5 is correct. Supply chain quality management (SCQM) is defined as a systems-based

2.2 Answers to Assignment 02

Assignment 02 consisted of 20 multiple-choice questions which covered topic 3 (learning units 7

Which of the following statements is correct?

See chapter 9B; pages 229-230 in the prescribed book.

See chapter 9B; pages 231-232 in the prescribed book.

See chapter 9B; pages 232-233 in the prescribed book.

The resulting graph looks as follows:

Proportion nonconforming (p)

(a) There are six processing steps.

See chapter 10; pages 242 to 244 in the prescribed book.

Statement d is true. A decision is indicated by a diamond:

For the following observations, calculate the class width of a histogram.