Planning and Measurement

Question 1

What characteristics must be present in order for JIT inventory management to function properly?

Answer 1

1. company places many small orders; suppliers deliver frequently in a timely manner. 2. Long term contracts; small number of suppliers; use of electronic funds transfer to pay invoices; real-time order. 3. Raw materials must be of consistently high quality. 4. Inspection can be reduced to a minimum. 5. Order and payment processing costs must be reduced.

Question 2

What are some JIT production environment characteristics?

Answer 2

1. Quick set up. 2. Skilled, flexible, and empowered workforce that can perform multiple tasks. 3. Low rate of defects.

Question 3

What are some measures of customer satisfaction?

Answer 3

1. Sales returns. 2. Warranty costs. 3. Customer complaints.

Question 4

Define quality of conformance.

Answer 4

Refers to the degree to which a product meets its design specifications and/or customer expectations.

Question 5

Define quality of design.

Answer 5

Meeting or exceeding the needs and wants of customers.

Question 6

Define costs of quality.

Answer 6

The costs incurred by an organization to ensure that its products and/or services have a high quality of conformance.

Question 7

What are the four categories of costs of quality?

Answer 7

1. Prevention costs. 2. Appraisal costs. 3. Internal failure costs. 4. External failure costs. The first two are conformance costs and the last two are non-conformance costs.

Question 8

Define and give examples of prevention costs.

Answer 8

Costs incurred to prevent the production of defective products. Examples: 1. Re-engineering to improve product design. 2. Improved production processes. 3. Better quality materials. 4. Programs to train personnel.

Question 9

Define and give examples of appraisal costs.

Answer 9

Costs incurred to identify defective products during manufacturing process. Examples: 1. Inspection. 2. Testing.

Question 10

Define and give examples of internal failure costs.

Answer 10

Costs of defective components and final products identified prior to shipment. Result in: 1. Scrap. 2. Rework. 3. Costs of delays due to defective products.

Question 11

Define and give examples of external failure costs.

Answer 11

Costs caused by failure of products in the hands of the customer. May result in: 1. Field Repairs. 2. Returns. 3. Warranty expenses. 4. Litigation.