Quality and Inventory Management

Question 1

How is quality idd to JIT?

Answer 1

Raw materials must be of consistently high quality. Because, there is little or no excess inventory to fall back on, the entire production process may be delayed if any materials are faulty.

Question 2

What is commonly considered the best method to use to minimize failure costs?

Answer 2

Prevention cost.

Question 3

Define “Pull” inventory models.

Answer 3

Pull models do not do any work until demanded by customer orders. Thus, customer demand “pulls” material orders, labor, and all other manufacturing activity throughout the plant.

Question 4

Define “economic order quantity model”.

Answer 4

A push model that specifies the most efficient quantity to order to minimize inventory costs.

Question 5

Define “backflush costing”.

Answer 5

A just in time (JIT) product costing approach in which costing is delayed until goods are completed or, in some cases, until the goods are sold.

Question 6

Explain the difference between “quality of design” and “conformance quality”.

Answer 6

Quality of design is about meeting or exceeding the needs and wants of customers, while quality of conformance is the degree to which a product meets its specifications.