Chapter 18

Question 1

Total quality management (TQM)

Answer 1

An integrated, principle-based, organization-wide strategy for improving product and service quality

Question 2

Principles

Answer 2

• customer focus : an organizational goal to concentrate on meeting customers needs at all levels of the organization
• customer satisfaction

Question 3

Continuous improvement

Answer 3

An organizations ongoing commitment to constantly assess and improve the processes and procedures used to create products and services

Question 4

Variation

Answer 4

A deviation in the form, condition, or appearance of a product from the quality standard for that product

Question 5

Teamwork

Answer 5

Collaboration between managers and nonmanagers, across business functions, and between companies, customers, and suppliers

Question 6

Internal service quality:

Answer 6

The quality of treatment employees receive from management and other divisions of a company

• employee satisfaction occurs when companies treat employees in a way that meets or exceeeds their expectations
• service capability is an employee perception of his or her ability to serve customers well

Question 7

Service recovery

Answer 7

Restoring customer satisfaction to strongly dissatisfied customers

• Requires employees to delight highly dissatisfied customers by surpassing their expectations of fair treatment
• Service employees are empowered
• given the authority and responsibility to make decisions that immediately solve customer problems

Question 8

Make-to-order operation

Answer 8

A manufacturing operation that divides manufacturing processes into separate parts or modules that are combined to create semi customized products

Question 9

Make-to-stock operation

Answer 9

A manufacturing operation that orders parts and assembles standardized products before receiving customer orders

Question 10

Manufacturing flexibility

Answer 10

The degree to which manufacturing operations can easily and quickly change the number, kind, and characteristics of products they produce
-categories
-continuous-flow production : a manufacturing operation that produces goods at a continuous, rather than a discrete, rate
Least flexible

Question 11

Line-flow production

Answer 11

Manufacturing processes that are preestablished occur in a serial or linear manner, and are dedicated to making one type of product
-relatively less flexible

Question 12

Batch production

Answer 12

A manufacturing operation that produces good in large batches in standard lot sizes
-relatively flexible

Question 13

Job shops

Answer 13

Manufacturing operations that handle custom orders or small batch jobs

• Each shop is different
• most flexible

Question 14

Inventory

Answer 14

The amount and number of raw materials, parts, and finished products that a company has in its possession

Question 15

Raw material inventories

Answer 15

The basic inputs in a manufacturing process

Question 16

Component parts inventories

Answer 16

The basic parts used in manufacturing that are fabricated from raw materials

Question 17

Work-in-process inventories

Answer 17

Partially finished good consisting of assembled component parts

Question 18

Finished goods inventories

Answer 18

The final outputs of manufacturing operations

Question 19

Average aggregate inventory

Answer 19

Average overall inventory during a particular time period

-weeks of supply: number of weeks it takes company to run out of current supply

Question 20

Stock out

Answer 20

The point when a company runs out of finished product

Question 21

Inventory turnover

Answer 21

The number of times per year that a company sells or ‘turnover’ it’s average inventory

Question 22

Ordering cost

Answer 22

The costs of associated with ordering inventory including the cost of data entry, phone calls, obtaining bids, correcting mistakes, and determining when and how much inventory to order

Question 23

Setup cost

Answer 23

The costs of downtime and list efficiency that occur when a machine is changed or adjusted to produce a different kind of inventory

Question 24

Holding cost

Answer 24

The cost of keeping inventory until it is used or sold, including storage, insurance, taxes, obsolescence, and opportunity

Question 25

Stockout cost

Answer 25

The cost incurred when a company runs out of product, including

Question 26

Kanban

Answer 26

A ticket based JIT system that indicates when to reorder inventory

Question 27

MRP materials required planning

Answer 27

Production and inventory system that determines the production schedule, production batch sizes, and inventory needed to complete final products