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The document defines quality and differentiates between goalpost and absolute quality conformance. It identifies the four types of quality costs: prevention, appraisal, internal failure, and external failure costs, providing examples of each. The document also discusses the benefits of Just in Time production systems and defines manufacturing lead time.

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68 views4 pages

Ca 2

The document defines quality and differentiates between goalpost and absolute quality conformance. It identifies the four types of quality costs: prevention, appraisal, internal failure, and external failure costs, providing examples of each. The document also discusses the benefits of Just in Time production systems and defines manufacturing lead time.

Uploaded by

dave lorenze
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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1.

Define Quality

Quality can be defined as conformance to specifications. The degree to which a


product meets the design specifications offering a satisfaction factor that fulfils all the
expectations that a customer wants. Products are manufactured and controlled
following normative regulations accepted in the market, so that in case of an inspection
by a regulatory body, the product proves that it meets the requirements established by
the related certifying organizations.

2. The general types of conformance are Goalpost conformance and Absolute


quality conformance. Differentiate the two.

Goalpost conformance is a conformance to a quality spec expressed as a


specified range around the targeted performance level; while

Absolute quality conformance requires all products or services to meet the


target value exactly, with no variation.

3. In Total Quality Management, it is necessary to identify quality related costs as a


basis for establishing budgets, help managers in controlling costs and identify its
relative importance to quality. Identify the Costs of Quality namely Prevention Cost,
Appraisal Cost, Internal Failure Cost and External Failure Cost. And give at least 3
examples for each.

Prevention Costs – the costs incurred to avoid or minimize the number of defects at
first place

1. System development
2. Quality training
3. Quality engineering

Appraisal Costs – the costs incurred to identify defective products before they are
shipped to customers. All costs associated with the activities that are performed during
manufacturing processes to ensure required quality standards are also included in this
category. Identification of defective products involve the maintaining a team of
inspectors. It may be very costly for some organizations.

1. Test and inspection of incoming materials


2. Final product testing and inspection
3. Supplies used in testing and inspection
Internal Failure Costs – those costs that are incurred to remove defects from the
products before shipping them to customers.
1. Net cost of scrap
2. Net cost of spoilage
3. Rework labor and overhead

External Failure Costs – If defective products have been shipped to customers,


external failure costs arise. External failure costs include warranties, replacements, lost
sales because of bad reputation, payment for damages arising from the use of defective
products etc. The shipment of defective products can dissatisfy customers, damage
goodwill and reduce sales and profits.
1. Cost of field servicing and handling complaints
2. Warranty repairs and replacement costs
3. Liability arising from defective products

4. What are the benefits of applying Just in Time (JIT) production system?

Reduction in storage and waiting time – materials are purchased and goods
produced only as required, rather than to build up stocks for future use. This alleviates
the need to make space for holding products and materials, and results in less time
wasted waiting for large amounts of materials and products.

Maintenance of equipment – The JIT system requires strict adherence to routine


maintenance schedules. Effective, preventive maintenance of equipment will allow the
company to avoid costly down time from machine breakdowns.

Employee satisfaction and stronger relationships – The JIT system also


encourages multi-skilled workers, flexible facilities and an atmosphere of teamwork.
These things improve the production system to help the company maintain a
competitive edge by seeking ways to improve its products, achieve more efficient
operations, and eliminate non-value-added costs.

The JIT system also encourages stronger relationships between suppliers and
producers. Under the JIT system, communication and information flow between the
supplier and producer are open, supporting strong supply coordination. These
relationships are enhanced by long-term contracts.
Automated purchasing – Under the JIT system, if materials are required, the supplier
will receive an electronic message to deliver them. This improves efficiency and
reduces time wastage. Automated purchasing also means that existing inventory levels
and production levels are calculated automatically, making things easier and more
efficient.

Reliable vendors – Under the JIT approach, suppliers are limited. This reduces the
amount of time spent on vendor relations, and ensures that the firm is working with only
reliable suppliers who can deliver high quality goods on time.

Long-term benefits of a JIT system – A long-term concentration on production growth


and supply requirements, and synchronizing changes in raw materials specifications
with suppliers, provide many long-term benefits to the business. The JIT system can
produce long-term benefits like cost savings, lower production costs and better
customer satisfaction.

5. Define Manufacturing Lead time (Manufacturing cycle time)

In manufacturing, Lead Time involves pre-processing time (the time needed to


make plans and handle paperwork), processing time (the time needed to manufacture
the product), and post-processing time (the time needed to deliver the product to the
customer). Lead Time in manufacturing is the Lead Time linked to Takt Time and Cycle
Time.
Manufacturing Lead time is the time that elapses from the sales order request to
completed production.
Sources:

https://www.gbnews.ch/what-is-your-definition-of-quality/

https://quizlet.com/31791623/cost-management-chapter-17-flash-cards/

https://www.accountingformanagement.org/costs-of-quality-or-quality-costs/
#:~:text=Prevention%20costs%3A&text=The%20costs%20incurred%20to
%20avoid,engineering%2C%20statistical%20process%20control%20etc.

https://www.unleashedsoftware.com/blog/benefits-jit-system-
approach#:~:text=Reduction%20in%20storage%20and%20waiting
%20time&text=Relatedly%2C%20the%20JIT%20system%20encourages,raw
%20materials%20and%20finished%20products.

https://clockify.me/blog/business/takt-time-cycle-time-lead-time/

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