Week 9

Question 1

Controllability principle

Answer 1

you can never hold someone accountable for something that they can’t control

Question 2

Conformance quality meaning

Answer 2

The extend to which a product meets a specific qualification (chair holding up 120kg as promised, doesn’t break at 110kg)

Question 3

Design quality meaning

Answer 3

How do characteristics of product matches needs and wants of customers

Question 4

Control costs meaning and types

Answer 4

Cost incurred to prevent low-quality products

1.Prevention costs [Supplier evaluations, Training]
2. Appraisal costs [Inspection, Product testing]

Question 5

Failure of control costs meaning and types

Answer 5

Cost arising due to low quality product

1. Internal failure costs [Rework and retests, Delays]
2. External failure costs [Customer support, Liability claims]

Question 6

Theory of constraints

Answer 6

Primary goal is to maximize throughput while maintaining or decreasing inventory and operating costs

Question 7

Economic value added

Answer 7

Operating profit after tax needs to be higher than costs of debt and equity