MGSC 395 COMPREHENSIVE ANSWERS AND
QUESTIONS SET A+
✔✔Internal failure costs - ✔✔costs resulting from defects that are discovered during the
production of a service or product
✔✔External failure costs - ✔✔costs that arise when a defect is discovered after the
customer receives the service or product
✔✔Warranty - ✔✔a written guarantee that the producer will replace or repair the
defective parts or perform the service to the customers satisfaction
✔✔Total quality management (TQM) - ✔✔a philosophy that stresses three principles for
achieving high levels of process performance and quality: (1) customer satisfaction, (2)
employee involvement, and (3) continuous improvement in performance
✔✔Quality - ✔✔a term used by customers to describe their general satisfaction with a
service or product
✔✔Quality at the source - ✔✔a philosophy whereby defects are caught and corrected
where they were created
✔✔Six sigma - ✔✔a comprehensive and flexible system for achieving, sustaining, and
maximizing business success by minimizing defects and variability in processes
✔✔R-chart - ✔✔a chart used to monitor process variability
✔✔R bar = - ✔✔avg of several past R values and the central line of the control chart
✔✔X bar-chart - ✔✔a chart used to see whether the process is generating output, on
average, consistent with a target value set by management for the process or whether
its current performance, with respect to the average of the performance measure, is
consistent with past performance
, ✔✔UCLxbar = - ✔✔x double bar + A2Rbar
✔✔LCLxbar = - ✔✔x double bar - A2Rbar
✔✔X double bar = - ✔✔central line of chart, which can either be the avg of past sample
means or target value set for the process
✔✔A2 = - ✔✔constant
✔✔Process capability - ✔✔the ability of the process to meet the design specifications
for a service or product
✔✔Nominal value - ✔✔a target for design specifications
✔✔Tolerance - ✔✔an allowance above or below the nominal value
✔✔Process capability ratio = - ✔✔USL - LSL / 6 standard deviations
✔✔Cp > 1 - ✔✔*want this* "bigger is better"
✔✔Cp < 1 - ✔✔all kinds of signals going on, bad product
✔✔Cp = 1 - ✔✔you're exactly wide enough to take up specification limits, making
defects of 0.3%
✔✔Process capability index - ✔✔Cpk = min {(USL - x double bar) / (3 standard
deviations) , (x double bar - LSL) / (3 standard deviations)}
✔✔SPC (statistical process control) - ✔✔the application of statistical techniques to
determine whether a process is delivering what the customer wants
✔✔ Operations management - ✔✔The systematic design, direction, and control of
processes that transforms inputs into serves and products for internal, as well as
external, customers
✔✔Process - ✔✔any activity or group of activities that takes one or more inputs,
transforms them, and provides one or more outputs for its customers
✔✔Operation - ✔✔a group of resources performing all or part of one or more processes
✔✔Supply Chain - ✔✔An interrelated series of processes within and across firms that
produces a service or product to the satisfaction of customers
QUESTIONS SET A+
✔✔Internal failure costs - ✔✔costs resulting from defects that are discovered during the
production of a service or product
✔✔External failure costs - ✔✔costs that arise when a defect is discovered after the
customer receives the service or product
✔✔Warranty - ✔✔a written guarantee that the producer will replace or repair the
defective parts or perform the service to the customers satisfaction
✔✔Total quality management (TQM) - ✔✔a philosophy that stresses three principles for
achieving high levels of process performance and quality: (1) customer satisfaction, (2)
employee involvement, and (3) continuous improvement in performance
✔✔Quality - ✔✔a term used by customers to describe their general satisfaction with a
service or product
✔✔Quality at the source - ✔✔a philosophy whereby defects are caught and corrected
where they were created
✔✔Six sigma - ✔✔a comprehensive and flexible system for achieving, sustaining, and
maximizing business success by minimizing defects and variability in processes
✔✔R-chart - ✔✔a chart used to monitor process variability
✔✔R bar = - ✔✔avg of several past R values and the central line of the control chart
✔✔X bar-chart - ✔✔a chart used to see whether the process is generating output, on
average, consistent with a target value set by management for the process or whether
its current performance, with respect to the average of the performance measure, is
consistent with past performance
, ✔✔UCLxbar = - ✔✔x double bar + A2Rbar
✔✔LCLxbar = - ✔✔x double bar - A2Rbar
✔✔X double bar = - ✔✔central line of chart, which can either be the avg of past sample
means or target value set for the process
✔✔A2 = - ✔✔constant
✔✔Process capability - ✔✔the ability of the process to meet the design specifications
for a service or product
✔✔Nominal value - ✔✔a target for design specifications
✔✔Tolerance - ✔✔an allowance above or below the nominal value
✔✔Process capability ratio = - ✔✔USL - LSL / 6 standard deviations
✔✔Cp > 1 - ✔✔*want this* "bigger is better"
✔✔Cp < 1 - ✔✔all kinds of signals going on, bad product
✔✔Cp = 1 - ✔✔you're exactly wide enough to take up specification limits, making
defects of 0.3%
✔✔Process capability index - ✔✔Cpk = min {(USL - x double bar) / (3 standard
deviations) , (x double bar - LSL) / (3 standard deviations)}
✔✔SPC (statistical process control) - ✔✔the application of statistical techniques to
determine whether a process is delivering what the customer wants
✔✔ Operations management - ✔✔The systematic design, direction, and control of
processes that transforms inputs into serves and products for internal, as well as
external, customers
✔✔Process - ✔✔any activity or group of activities that takes one or more inputs,
transforms them, and provides one or more outputs for its customers
✔✔Operation - ✔✔a group of resources performing all or part of one or more processes
✔✔Supply Chain - ✔✔An interrelated series of processes within and across firms that
produces a service or product to the satisfaction of customers
