QUALITY OF GOODS AND SERVICES Flashcards
Concept of Quality
Refers to a product (goods or services) being fit for purpose.
The good or service must:
Comply with all relevant legal requirements, for example, design and safety legislation.
Does what the customer expects, for example, 5 star hotel.
Benefits of providing quality goods and services
Reduces waste
The number of goods which are ‘rejects’ is reduced. This reduces:
Recalls of defective products
The return of products from dissatisfied customers
Goods having to be sold as ‘second’ a lower price and profit (seconds are products which have minor faults)
Reputation
Satisfied customers will:
Buy in the future from the business, so it retains customers
Recommend the business to others, so the business gains customers
Reduce the risk of the business developing a poor reputation, so it does not lose customers
Competitive advantage
Production disruption
Production may be disrupted if the quality of materials produced at the early stage in the process is not good enough to be used.
Quality Control
A system for inspecting the quality of goods and services produced and ensuring that they are of the required standard.
WHY?
To check each product is of sufficiently high standard.
HOW?
Involves a physical inspection by an inspector or by a machine. For example, services involve mystery shoppers.
Advantages and disadvantages of quality control
ADVANTAGES
DISADVANTAGES
Sales: Prevents poor quality/faulty goods and services being sold. Therefore reducing returns.
Waste: It does not prevent waste of resources when products are faulty.
Production: Workers can continue to producing whilst inspection takes place therefore not disrupting production.
Expensive: The cost of inspections can be expensive. For example, wages of inspectors or cost of testing goods.
Reputation: Producing good quality goods and services will improve the reputation of the business and therefore increase customers and overall sales.
Encouragement: It does not encourage workers to be responsible for quality.
Quality assurance
An approach that involves the whole business focusing on quality.
WHY?
The aim is to prevent quality problems from arising.
HOW?
Making all workers responsible for quality. For example, if the first worker makes a part of a product then they are treating the next worker its passed onto as their customer.
Advantages and disadvantages of quality assurance
ADVANTAGES
DISADVANTAGES
Reduce waste: There will be less wastage and this can reduce the cost of production.
Increased costs: It can be expensive to ensure workers are trained correctly to be able to deliver the level of quality required.
Reputation: If quality goods and services are produced it will improve the reputation of the business.
Disruption: Production could be disrupted due to workers stopping to check the quality of their work.
Workers feel valued: As workers have responsibility they will feel valued which will motivate them to work harder increased productivity.
Workers feel stressed: Workers may feel stressed by the responsibility and pressure to deliver high quality and check their own work.
