Improving quality

Question 1

Tangible measures of quality

Answer 1

• Appearance
• Reliability
• Durability
• Functions
• After sales service
• Repair and maintenance needs

Question 2

Intangible measures of quality

Answer 2

• Brand image
• Reputation
• Exclusiveness

Question 3

How does a business know if quality is becoming a problem?

Answer 3

• Failure or reject rates
• Level of product returns
• Customer complaints
• Customer satisfaction - usually measured by a survey
• Customer loyalty - evident from repeat purchases or renewal rates

Question 4

Quality circles

Answer 4

A group of employees who meet regularly to consider ways of resolving problems and improving production in their organisation.

Question 5

Quality control

Answer 5

A system of maintaining standards in manufactured products by testing a sample of the output against the specification.

Question 6

Quality assurance

Answer 6

The maintenance of a desired level of quality in a service of product, especially by means of attention to every stage of the process of delivery or production.

Question 7

Total Quality Management (TQM)

Answer 7

The philosophy of a quality ethos that occurs throughout a business. All employees take responsibility for checking and correcting work.

Question 8

Why quality is important for a business

Answer 8

• For gaining a competitive advantage - better quality products will be more popular, so customers will choose this over other options
• Impact on sales volume - better quality products are likely to sell more
• Impact on selling price - higher quality, so can sell for a higher price (price inelastic)
• Cost reductions - less reject/reworking costs, lowering overall costs
• Brand loyalty, reputation - good brand image, and customer loyalty will increase

Question 9

Consequences of poor quality

Answer 9

• Reputation
• Lower sales volume
• Lower price
• Lower profits
• More waste
• Increased costs

Question 10

Is quality that important?

Answer 10

A business that focuses on quality will receive benefits but could also suffer because:
- Quality is subjective - it is a matter of personal opinion
- Not all aspects of quality are tangible eg: brand name or reputation
- Quality is always evolving because of things like improved technology, better materials, new manufacturing techniques and fresh competitors
- Controlling quality can also be costly, so it is important that the benefits outweigh the costs in the long term