Quality Concepts

Economics - ANS The production, distribution, and consumption of goods and services. What happens when competition is low? - ANS Production can be inefficient, without being penalized and manpower and other resources can be wasted. Competition leads to lower prices. When you move from monopolies to more competition, is innovation less or more? - ANS More innovation and less cost. Why are companies in business? - ANS to make money 1-10-100 rule - ANS As work moves through a process the price to correct it increases. prevention is less costly than correction is less costly than failure. When you are setting up your customer, what are the basic questions you ask them? - ANS - What do you need from me? - What will you do with what I give you? - Do you understand What I can give you? - Do we agree on What the requirements are? Is it important to cut 2% of any process in the company? - ANS Cutting 2% of a process is extremely important as long as the process in unnecessary. Non-essential processes should be cut to increase profit as much as possible. Ex. Some companies operate on 2% profit. The Cost of Quality - ANS The cost of not creating a quality product or service. Any cost that would not have been expended if quality were perfect contributes to the cost of quality. Every time work has to be redone the cost of quality increases. Seven obvious examples of the cost of quality. - ANS - The reworking of a manufactured item. - The retesting of an assembly. - The rebuilding of a tool. - The correction of a bank statement. - The reworking of a service. - The cost of exceeding customer requirements. -The cost of lost opportunities. Failure Cost (6 types) - ANS - Scrap - Rework - Reinspection - Retesting - Material review - Downgrading