M3 Flashcards
Any instance when a process fails to satisfy its customer
Defect
Costs associated with preventing defects before they happen are known as
Prevention Costs
Costs incurred when the firm assess the performance level of its processes are known as
Appraisal Costs
What are three examples of appraisal costs?
Verification
Quality Audits
Supplier Rating
Costs resulting from defects that are discovered during the production of a service or product are known as
Internal Failure Costs
What are three examples of internal failure costs?
Rework or rectification
Scrap
Waste
Costs that arise when a defect is discovered after the customer receives the service or product are known as
External Failure Costs
What are 4 examples of external failure costs?
1) Repairs and servicing of returned and items actually being used by customers
2) Complaints
3) Returns
4) Warranty
A written guarantee that the producer will replace or repair defective parts or perform the service to the customer’s satisfaction is known as
Warranty
Societal and monetary costs associated with deceptively passing defective services or products to internal or external customers such that it jeopardizes the well-being of stockholders, customers, employees, partners, and creditors are known as
Ethical Failure Costs
What are the three elements of deceptive business practices?
1) The conduct of the provider is intentional and motivated by a desire to exploit the customer
2) the provider conceals the truth based upon what is actually known to the provider
3) the transaction is intended to generate a disproportionate economic benefit to the provider at the expense of the customer
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 is known as
Total Quality Management
A term used by customers to describe their general satisfaction with a service or product
Quality
What does conformance to specifications relate to?
Consistent quality
on-time delivery or delivery speed
T/F-How much value a service or product has in the mind of the customer depends on the customer’s expectations before purchasing it.
True
Come back to pg 101 and do fitness for use
support
psychological impressions
cultural change
A philosophy whereby defects are caught and corrected where they were created is known as
Quality at the Source
Small groups of people who have a common purpose, set their own performance goals and approaches, and hold themselves accountable for success are known as
Teams
An approach to teamwork that moves responsibility for decisions further down the organizational chart—to the level of the employee actually doing the job is known as
Employee Empowerment
What is the Japanese concept for continuous improvement?
Kaizen
The philosophy of continually seeking ways to improve processes based on a Japanese concept called kaizen is also known as
Continuous Improvement
What is another term to describe the plan-do-study-act cycle?
Deming Wheel
A cycle, also called the Deming wheel, used by firms actively engaged in continuous improvement to train their work teams in problem solving is known as
Plan-Do-Study-Act cycle
A comprehensive and flexible system for achieving, sustaining, and maximizing business success by minimizing defects and variability in processes is known as
Six Sigma
