CHAPTER 8A- QUALITY MANAGEMENT
directly, does the product seem like a high-quality
Which of the following is a definition of Quality?
-Conformance to Specifications
- Whether or not a product or service lives up to customer
expectations
You need to evaluate services quality a little differently
than you evaluate product quality.
True
To achieve quality at the source, you need to focus on
which of the following?
Prevention, Personal Responsibility, and Standardization
The total-cost-of quality framework breaks out quality
costs into which four categories
Prevention Cost
Appraisal Cost
Internal Failure Costs
External Failure Costs
By investing in prevention and appraisal costs, your real
goals is what?
you can identify failure costs and attempt to reduce them
to zero. Your real goal: Identify and eliminate the causes of
problems before they occur.
Eight Quality Dimensions of Products
-Performance-Does the product does what you want it to
do?
-Features-Does the product possesses the features you are
looking for?
-Reliability-Does the product consistently performs as it is
supposed to over time?
-Conformance-Does the product conforms to design
specifications?
-Durability-How long will the product perform or last, and
under what conditions?
-Serviceability-Is the product relatively easy to maintain
and repair?
-Aesthetics-Does the product look, sound, taste, or smell
the way it should?
-Perception-For any dimension that cannot be observed
product?
Five Quality Dimensions of Service
-Tangibles-How pleasing is the appearance of the physical
facilities, equipment, personnel, and communication
materials?
-Reliability-How dependably can the service provider
provide promised service?
-Responsiveness-How willing, able, and promptly is the
service provider to help you?
-Assurance-How knowledgeable and courteous are the
service employees and how well do they convey trust and
confidence?
-Empathy-How well does the service provider provide
caring, individualized attention to its customers?
Quality has more influence on a company than any other
value-added dimensions.
True
The core objective in six sigma’s is to reduce variation in
processes.
True
Which quality guru is responsible for the four steps—
Plan, Do, Check, Act (PDCA)—cycle that is used by almost
every global manufacturer today?
W. Edward Deming
Six Sigma is built on which very critical fact?
Variability in a process produces defects, errors, and
waste. Six sigma's core objective is to reduce process
variation.
How is the statistical concept of six sigma used?
Six Sigma uses statistical tools to help you identify which
type of variation is present in your processes as well as
how to address that variation to improve your process.
Process Capability (Cp)=
Acceptable Tolerances/Actual Process Variation
What does a process capability analysis allow you to do?
Verify that your process is capable of performing at your
desired quality level
Under what circumstances would you use process What are the four stems to E. Edward Deming's four-step
capability analysis? continuous improvement processes?

You want to verify that the process is capable of
consistently producing good outputs
In the process capability ratio, six sigma captures almost
88% of the process variability.
False
As a rule of thumb, a Cpk of less than 1.5 indicates that
your process can meet your desired quality levels.
False
In the process capability ratio, the farther off-center the
process is operating, the more likely it is to produce
unacceptable parts. This adjustment is represented by
which symbol?
k by showing the frequency at which each cause occurs?
Plan, Do, Check, Act.
The Ishikawa cause-and-effect diagram is also known as
the
Fishbone Diagram
Which of the following are potential sources of variation
in the Ishikawa cause-and-effect diagram?
People, Methods, Machines, Materials
Which of the following tools would you use to identify
the most likely cause of a quality problem?
Pareto Chart
Which of the following helps you make priorities visible

The tool that monitors processes and keeps them Pareto Diagram
production high-quality products is?

Statistical Process Control

Quality
Control

What is
Quality
control? A
process that
evaluates
output
relative to a
standard
and takes
Statistical process control charts measure what? corrective action when output doesn’t meet standards.

Variable and Attributes

A control chart that measures attributes measures what?

Characteristics that has a discrete value and can be

counted
Phases of Quality Assurance
With respect to control chart logic, processes that are
designed to produce to a specific quality number is
called?

Target

A control chart that is constructed using a mean is called

a/an...

X-Chart

What is Inspection? An appraisal activity that compares
goods or services to a standard
Inspection issues:
1. How much to inspect and
how often?
2. At what points in the
process to inspect
3. Whether to inspect in a
centralized or on-site
location
4. Whether to inspect
attributes or variables
Where to inspect in the Process: Typical inspection
points:
• Raw materials and purchased parts
• Finished products
• Before a costly operation
• Before an irreversible process
• Before a covering process
Centralized vs On-site inspection
 Effects on cost and level of disruption are a
major issue in selecting centralized vs. on-site
inspection.
 Centralized: Specialized tests that may best be
completed in a lab, More specialized testing
equipment, More favorable testing environment
 On-Site: Quicker decisions are rendered, Avoid
introduction of extraneous factors, Quality at the
source.
Statistical Process Control (SPC)- Quality control seeks,
Quality of conformance (A product or service conforms to
specifications). A tool used to help in this process:
Statistical evaluation of the output of a process, Helps us
to decide if a process is “in control” or if corrective action
is needed
Process Variability
Two basic questions: concerning variability:
1. Issue of process control: Are the variations random? If
nonrandom variation is present, the process is said to be
unstable.
2. Issue of process capability: Given a stable process, is the
inherent variability of the process within a range that
conforms to performance criteria?
Variation
• Random (common cause) variation: Natural
variation in the output of a process, created by
countless minor factors
• Assignable (special cause) variation: A variation
whose cause can be identified. A nonrandom
variation.
Sampling and Sampling Distribution- SPC involves
periodically taking samples of process output and
computing sample statistics: - Sample means, - The
number of occurrences of some outcome.
Sample statistics are used to judge the randomness of
process variation.
Control Process- Sampling and corrective action are only a
part of the control process
Steps required for effective control:
• Define: What is to be controlled?
• Measure: How will measurement be
accomplished?
• Compare: There must be a standard of
comparison
• Evaluate: Establish a definition of out of control
• Correct: Uncover the cause of nonrandom
variability and fix it
• Monitor: Verify that the problem has been
eliminated
Control Charts: The Voice of the Process
• Control chart: A time ordered plot of
representative sample statistics obtained from
an ongoing process (e.g. sample means), used to
distinguish between random and nonrandom
variability
• Control limits: The dividing lines between
random and nonrandom deviations from the
mean of the distribution. Upper and lower
control limits define the range of acceptable
variation.
Error
• Type I error: Concluding a process is not in
control when it actually is.
• The probability of rejecting the null hypothesis
when the null hypothesis is true.
• Manufacturer’s risk
Type II error
 • Concluding a process is in control when it is not.
• The probability of failing to reject the null
hypothesis when the null hypothesis is false.
• Consumer risk
Managerial Considerations
o At what points in the process to use
control charts
o What size samples to take
o Sample frequency
o What type of control chart to use:
Variables, Attributes
Run Test
• Even if a process appears to be in control, the
data may still not reflect a random process
• Analysts often supplement control charts with a
run test
Run test: A test for patterns in a sequence
Run: Sequence of observations with a certain
characteristic.
Process Capability: Once a process has been determined
to be stable, it is necessary to determine if the process is
capable of producing output that is within an acceptable
range.
• Tolerances or specifications: Range of
acceptable values established by engineering
design or customer requirements.
• Process variability: Natural or inherent
variability in a process.
• Process capability: The inherent variability of
process output (process width) relative to the
variation allowed by the design specification
(specification width).
Improving Process Capability:
• Simplify
• Standardize
• Mistake-proof
• Upgrade equipment
• Automate
Limitations of Capabilities measures
There are several risks of using capability measures:
• The process may not be stable
• The process output may not be normally
distributed
• The process not centered but Cp is used
Operations Strategy
Quality is a primary consideration for nearly all
customers
Achieving and maintaining quality standards is of strategic
importance to all business organizations
o Product and service design
o Increase capability in order to move from
extensive use of control charts and inspection to
achieve desired quality outcomes
Broadly defined, quality refers to the ability of a
product or service to occasionally meet or exceed
customer expectations.
FALSE (Quality refers to consistently meeting or
exceeding customer expectations.)
An organization achieves quality by consistently
meeting its competitors' standards.
FALSE (An organization achieves quality by meeting
or exceeding customer expectations.)
Because courtesy is subjective, it cannot be
considered a factor in service quality.
FALSE (Many dimensions of quality are subjective.)
ISO 9000 standards stress continual improvement
regardless of how good you currently are.
TRUE (ISO 9000 guidelines stress continual
improvement.)
The dimensions of quality are important for products
but are not applicable in service organizations.
FALSE (Dimensions of quality are important for both
products and services, although the dimensions used
for services are somewhat different from those used
for products.)
Regardless of superior quality, consumers will not pay
premium prices.
FALSE (Customers will often pay premium prices for
superior quality.)
High performance and low prices are both considered
to be dimensions of quality.
FALSE (Price is not considered a dimension of
quality.)
The Baldrige award can only be won by
manufacturing organizations.
FALSE (The Baldrige Award is awarded to
organizations in multiple categories including service,
health care, and education.)
Quality of conformance refers to the degree to which
goods and services conform to the intent of the
designers as documented in the specifications.
TRUE (High conformance to designer intent leads to
high quality of conformance.)
Quality of design refers to the intention of the
designers to include or exclude certain features in a
product or service based on marketing and other D. is customer-driven.
information. E. is national rather than international.
TRUE (Quality of design involves considering C. is an ongoing process. (Unlike the Baldrige Award,
customer wants, production or service capability, ISO registered companies face an ongoing series of
safety, costs, and other similar considerations.) audits, and they must be reregistered every three
In addition to correcting substandard work, employees years.)
have an ethical obligation to __________ the quality Six sigma programs involve both __________ and
problem as well. __________ components.
A. prevent A. probabilistic; deterministic
B. offset B. logistical; managerial
C. report C. statistical; probabilistic
D. standardize D. managerial; technical
E. redesign E. local; global
C. report (Employees have an ethical obligation to D. managerial; technical (There are management and
make known, in a timely manner, quality problems.) technical components of six-sigma programs.)
When an organization comes to the realization that The "Control" phase of DMAIC is intended to ensure
there are quality problems in products that are already that:
in service, ethical A. the proper subset of process inputs are monitored.
approaches include: B. variability reduction is pursued.
(I) divulging the information to the public at large. C. data analysis is overseen.
(II) recalling, if possible, affected products. D. inputs are closely monitored.
(III) handling complaints on an individual rather than a E. improvements are sustained.
systemic basis. E. improvements are sustained. (In DMAIC, control
A. I and III involves establishing plans and procedures to ensure
B. I and II that improvements are sustained.)
C. II and III Among the guiding principles of six sigma are:
D. I, II, and III (I) Reduction of variation is an important goal.
E. Neither I, II, nor III (II) Valid measurement is critical.
B. I and II (Dealing with complaints on an individual (III) Outputs determine inputs.
basis would be a shirking of the organization's ethical (IV) We should focus on those critical few influences
responsibilities.) on our quality.
The quality certification that deals primarily with A. I, II, and IV only
conformance to customer requirements is ISO B. II and IV only
__________; ISO __________ is concerned primarily C. I and III only
with the organization's effect on the environment. D. I, II, III, and IV
A. 9000; 14000 E. III only
B. 24700; 9000 A. I, II, and IV only (Six sigma is based on these
C. 14000; 9000 guiding principles: (1) Reduction of variation is an
D. 9000; 24700 important goal; (2) valid measurements are absolutely
E. 14000; 24700 necessary; (3) outputs are determined by inputs; and
A. 9000; 14000 (ISO 9000 is concerned with what an (4) only a critical few inputs have a significant impact
organization does to ensure that its products or on outputs.)
services conform to its customers' requirements. ISO A tool that is not used for quality management is a:
14000 concerns what an organization does to A. flowchart.
minimize harmful effects to the environment caused B. histogram.
by its operations.) C. Pareto analysis.
ISO certification is similar to the Baldrige Award in its D. redesign.
emphasis on: E. check sheet.
A. statistical tools. D. redesign. (Redesigns aren't part of quality
B. self-appraisal. management.)
C. teamwork. A tool that uses time-ordered values of a sample
D. outsourcing. statistic to help detect the presence of correctable
E. services. causes of variation in a process is a(n):
B. self-appraisal (Similar to the Baldrige Award, the A. affinity diagram.
ISO review process involves considerable self- B. checklist.
appraisal.) C. control chart.
ISO certification differs substantially from the Baldrige D. flowchart.
Award in that it: E. relationship diagram.
A. focuses primarily on quality teams. C. control chart. (Control charts depict process
B. emphasizes self-appraisal. variation.)
C. is an ongoing process. Which is not a cost of quality?
A. prevention cost
B. external failure costs (II) recognize quality achievements of U.S.
C. extended service contract costs companies.
D. internal failure costs (III) stimulate efforts to improve quality.
E. appraisal costs (IV) distribute the grant money available for improved
C. extended service contract costs (The costs of quality.
quality can be classified as prevention, appraisal, and A. I and IV only
failure (both internal and external). Extended service B. I and II only
contracts are C. II and III only
not quality costs.) D. I, II, III, and IV
The Deming Prize was established by the: E. I, II, and III only
A. American Statistical Association. E. I, II, and III only (The purpose of the Baldrige
B. Union of Japanese Scientists. Award competition is to stimulate efforts to improve
C. North American Free Trade Association. quality, to recognize quality achievements of U.S.
D. American Quality Society. companies, and to publicize successful programs.)
E. World Trade Organization. Fixing a problem will often cost money; to minimize
B. Union of Japanese Scientists. (The Deming Prize these costs it is best to find and fix the problem:
is a prominent Japanese quality award.) A. just before shipping our product to the customer.
Lost production time, scrap, and rework are examples B. immediately after we complete the last operation.
of: C. during the design phase.
A. internal failure costs. D. just before we begin the first production operation.
B. external failure costs. E. Regardless of when you fix the problem, costs are
C. appraisal costs. about the same.
D. prevention costs. C. during the design phase. (Fixing a problem during
E. replacement costs. the design phase prevents a failure from ever
A. internal failure costs. (These are internal failure occurring. The earlier a problem is identified in the
costs.) process, the cheaper the cost to fix it. The cost to fix a
Warranty service, processing of complaints, and costs problem at the customer end has been estimated at
of litigation are examples of: about five times the cost to fix a problem at the design
A. internal failure costs. or production stages.)
B. external failure costs. Deciding how much to invest in the prevention of
C. appraisal costs. defects can be analyzed using:
D. prevention costs. A. EVPI.
E. replacement costs. B. net present value.
B. external failure costs. (these are appraisal costs) C. weighted factor analysis.
Costs of inspectors, testing, test equipment, and labs D. return on quality.
are examples of: E. break-even analysis.
A. internal failure costs. D. return on quality. (ROQ focuses on the economics
B. external failure costs. of quality efforts.)
C. appraisal costs. The Baldrige Award is based on evaluations in seven
D. prevention costs. main areas. Which is not one of those?
E. replacement costs. A. relative profitability
C. appraisal costs. (These are appraisal costs.) B. strategic planning
Loss of business, increased liability, decreased C. human resource management
productivity, and higher costs are all likely D. information and analysis
consequences of: E. leadership
A. labor unions. A. relative profitability (Relative profitability is not a
B. globalization. main area of evaluation for the Baldrige Award.)
C. poor quality. A quality circle is:
D. robotics. A. responsible for quality.
E. micro-factories. B. total quality control.
C. poor quality. (Poor quality tends to have adverse C. an inspection stamp found on meat.
effects on all these areas.) D. a group of employees who meet to discuss ways of
Quality planning and administration, quality training, improving products or processes.
and quality control procedures are examples of: E. a team of customers and their contacts within the
A. internal failure costs. company who meet to discuss ways of improving
B. external failure costs. products or processes.
C. appraisal costs. D. a group of employees who meet to discuss ways of
D. prevention costs. improving products or processes. (Quality circles are
E. replacement costs. groups of employees who meet to discuss ways of
D. prevention costs (These are prevention costs.) improving products or processes.)
The Baldrige Award aims to: ISO 9000 currently stresses _____ of a certified
(I) publicize successful quality programs. organization.
A. minimizing harmful environmental effects D. flowchart.
B. product diversity E. runs chart.
C. inclusion of reused components in the office C. check sheet. (Check sheets help in the collection
equipment and organization of data.)
D. a minimum of four supervisory levels A quality improvement technique that involves the
E. continual improvement sharing of thoughts and ideas in a way that
E. continual improvement (Continual improvement is encourages unrestrained collective
emphasized in ISO 9000 certification.) thinking is:
The quality tool which helps focus on the most A. Pareto analysis.
important problem areas based on the 80-20 rule is: B. benchmarking.
A. brainstorming. C. brainstorming.
B. check sheets. D. a control chart.
C. Pareto analysis. E. a check sheet.
D. cause-and-effect diagrams. C. brainstorming (Brainstorming involves the sharing
E. fail-safe methods. of thoughts and ideas in a way that encourages
D. cause-and-effect diagrams (Pareto analysis is unrestrained collective thinking.)
based on the concept that approximately 80 percent In order for TQM to be successful, it is essential that
of the problems come from 20 percent of the causes most of the organization be:
of problems.) A. members of quality circles.
The quality tool that resembles a "fishbone" is: B. under contract.
A. brainstorming. C. ISO certified.
B. check sheets. D. trained in error detection techniques.
C. Pareto analysis. E. in agreement with the philosophy and its goals.
D. cause-and-effect diagrams. E. in agreement with the philosophy and its goals.
E. fail-safe methods. (TQM won't work without substantial buy-in.)
D. cause-and-effect diagrams. (These are also known Which of the following raises quality risks?
as Ishikawa diagrams.) A. currency fluctuations
TQM stands for: B. outsourcing to less-developed countries
A. Taguchi Quality Methods. C. empowering employees
B. Tactical Quality Measurements. D. benchmarking
C. The Quality Matrix. E. streamlining the supplier base
D. Total Quality Management. B. outsourcing to less-developed countries (Quality
E. Total Quantity Measurement. risks increase when outsourcing to less-developed
D. Total Quality Management. (TQM stands for Total countries.)
Quality Management.) A technique for focusing attention on the most
Which of the following is not an element of TQM? important problem areas is:
A. continuous improvement A. quality circles.
B. competitive benchmarking B. quality assurance.
C. employee empowerment C. brainstorming.
D. team approach D. Pareto analysis.
E. quality management as a specialized function E. cause-and-effect analysis.
within the firm D. Pareto analysis. (Pareto analysis directs attention
E. quality management as a specialized function to the most important areas.)
within the firm (TQM requires the involvement of A chart showing the number of occurrences by
everyone in the organization rather than making category would be used in:
quality management a specialized function within the A. Pareto analysis.
firm.) B. interviewing.
The tool that is useful in documenting the current C. cause-and-effect diagrams.
process is a: D. benchmarking.
A. control chart. E. quality function deployment.
B. Pareto chart. A. Pareto analysis. (We would look for root causes to
C. check sheet. the most frequently occurring quality failures.)
D. flowchart. Cause-and-effect diagrams are sometimes called:
E. cause-and-effect diagram. A. Pareto diagrams.
D. flowchart (The flowchart graphically depicts how a B. fishbone (Ishikawa) diagrams.
process works.) C. run charts.
The tool that is useful in the collection and D. control charts.
organization of data is a: E. responsibility charts.
A. control chart. B. fishbone (Ishikawa) diagrams. (These help in
B. Pareto chart. thinking through what might be causing a quality
C. check sheet. problem.)
The process of identifying other organizations that are with existing suppliers.
best at some facet of your operations, analyzing your A. I
performance versus B. II
theirs in order to establish a standard against which to C. III
judge performance, and identifying a model for D. I and II only
learning how to improve isknown as: E. I, II, and III
A. continuous improvement. E. I, II, and III (All of these are considerations that
B. employee empowerment. must be taken into account.)
C. benchmarking. Focusing a supply chain on ________________ is a
D. copycatting. modern way of ensuring high-quality inputs and
E. industrial espionage. extending an organization's
C. benchmarking. (It is important to benchmark continuous improvement efforts.
against best-in-class processes.) A. lowest cost per unit sourced
Giving workers responsibility for quality improvements B. close, collaborative ties with suppliers
and authority to make changes is known as: C. suppliers that emphasize continuous-flow
A. continuous improvement. production
B. passing the buck. D. ISO 14000 customers
C. benchmarking. E. partners pursuing similar strategies
D. employee empowerment. B. close, collaborative ties with suppliers
E. employee involvement. (Collaborative relationships with suppliers often lead
D. employee empowerment. (Empowered employees to higher quality.)
are often very effective in improving quality.) To minimize quality risks, which of the following would
The typical difference between quality circles and be least likely to be outsourced to less-developed
continuous improvement teams is: countries?
A. quality circles work on product design only. A. rubber processing
B. continuous improvement teams work on product B. repetitive assembly
and process design. C. packaging
C. continuous improvement teams use only D. pharmaceutical
engineers, while quality circles use just the workers E. steel manufacturing
doing the work. D. pharmaceutical (Pharmaceutical firms incur
D. the amount of employee empowerment. substantial quality risks when they outsource to less-
E. There is no difference—they are the same. developed countries.)
D. the amount of employee empowerment. (Quality If customer satisfaction does not always lead to
circles often work with processes over which they customer loyalty, firms may need to focus additional
have little authority.) effort on __________
Which of the following is not a typical goal of process strategies.
improvement? A. remediation
A. increasing customer satisfaction B. retention
B. reducing waste C. rework
C. achieving higher quality D. repatriation
D. increasing market share E. reprocessing
E. All are the goals B. retention (Increasing customer satisfaction
D. increasing market share (Typical goals of process doesn’t' t necessarily increases customer
improvement include increasing customer loyalty.)
satisfaction, reducing waste, and achieving higher Before a dimension of quality can be made
quality.) operationally useful, it must be restated in some
Managers have obligations to a wide variety of ___________ form.
stakeholders such as shareholders, employees, and A. qualitative
customers. When considering B. manipulative
outsourcing production to offshore suppliers, C. certifiable
managers have to weigh: D. measurable
(I) cost benefits that might make shareholders E. marketable
wealthier. D. measurable (Dimensions of quality have to be
(II) quality issues that might make firms less translated into measurable characteristics.)
productive and
...
or products riskier.
(III) the investments already tied up in relationships