...1. Cost of Quality Analysis A focus on quality management demands that the total cost and benefits of quality performance be first understood by everyone in the company. In order to successfully launch a companywide Six Sigma, the first step is to dig out all relative cost categories that associated with managing quality and quality failures. The marketing research and other similar costs categories should all be included in the Cost of Quality (CoQ) analysis. 1.1 Identification of Cost Categories Based on Roberta’s current CoQ analysis, there are 18 cost categories with question marks that she either did not have data for or wasn’t sure about including. For the prevention costs, Roberta is having problem with the costs of marketing research, customer/user perception surveys/clinics, supplier quality planning, supplier quality planning, quality program planning and reporting, and other prevention costs. As mentioned earlier in the case, Roberta wasn’t sure how the marketing manager would feel about including marketing research as a category in the CoQ because it seems that marketing research as well as the customer perception surveys have no direct relation with preventing product defects. In fact, the fast development and introduction of new product is a key factor that differentiates Aqua Fun from their competitors in the same market. To ensure the quality of the new products before they are launched into the market, it is essential for the company to develop effective and...
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...Quality Management Of Aqua-Fun ----Case 1 in Chapter 6 Team 4: Yudan Ding Wenqian Xu Xianjing Zhu Yukun Chen SCHM2301 Prof. Omar Elwakil 10/08/2013 Quality Management of Aqua-Fun 1. Cost of Quality Analysis A focus on quality management demands that the total cost and benefits of quality performance be first understood by everyone in the company. In order to successfully launch a companywide Six Sigma, the first step is to dig out all relative cost categories that associated with managing quality and quality failures. The marketing research and other similar costs categories should all be included in the Cost of Quality (CoQ) analysis. 1.1 Identification of Cost Categories Based on Roberta’s current CoQ analysis, there are 18 cost categories with question marks that she either did not have data for or wasn’t sure about including. For the prevention costs, Roberta is having problem with the costs of marketing research, customer/user perception surveys/clinics, supplier quality planning, supplier quality planning, quality program planning and reporting, and other prevention costs. As mentioned earlier in the case, Roberta wasn’t sure how the marketing manager would feel about including marketing research as a category in the CoQ because it seems that marketing research as well as the customer perception surveys have no direct relation with preventing product defects. In fact, the fast development and introduction of new product is a key factor that differentiates...
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...This summary will discuss the four costs of quality and which cost I think supply chain quality would fall under. I will define what the functions of the supply chain are, and review the quality cost categories in detail. “The supply chain is a network of manufacturing and service operations that supply one another from raw materials through manufacturing to the ultimate customer. The supply chain consists of the physical flow of materials, money and information along the entire chain of purchasing, production, and distribution”. (Schroeder, 2011) There are a few different strategies regarding how to measure quality. The company may use a prevention or inspection strategy, rely upon technical training or managerial training, and or selected on quality or cost. The term cost of quality may seem misleading because it is not actually how much the quality product costs. It is far more complicated. Cost of control and cost of failure of control are the two main categories of quality cost. Within the two categories are prevention costs, appraisal costs, internal failure costs, and external failure costs. (Feigenbaum, 1991) It is difficult to determine where to apply the cost of quality for the supply chain because the supply chain reaches and affects all business units. If the company takes a prevention or inspection approach to quality, then it would be considered a control cost. These costs stem from work done to prevent product deficiencies as well as finding defects...
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...Depot, Canadian Tire, Kmart, and Zellers has substantially changed their position in the marketplace. As a result, retailers now expect manufacturers to provide high quality products at a very low price. Consequently, with more choices this reduces the demand of Clearwater’s product and sales. Accordingly, the senior management team with endorsement from the Board of Directors has created a new strategy with changes that 1) Protect our brands 2)Customize 3) Innovate constantly 4) Organize around the category retailer 5) Invest in technology and 6) Reduce costs or cut the fat. The report will begin with an examination of the prominent issues that are currently facing Clearwater. This will be followed by an analysis of the implications associated with those issues. After the analysis, recommendations, that will help to monitor and enhance the current strategy and the cost of quality report, will be provided. Problems/Issues Currently, there are three critical issues that could hurt Clearwater’s ability to successfully supply to the category retailers. The first issue is that there is no MIS in place to monitor the new strategy, as we need feedback and something to measure of financial and non-financial performance. The Cost of Quality Report needs to be revised as management needs a better cost analysis COQ report as important items are missing and the data is solely based on the experience of the vice president of production and a production scheduling engineer...
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...conscientious market * Doesn’t exclude a product line * Not low enough to start a price war * Price is closer to Grand American and Missouri Mart (7% lower currently) * Reduce cost from lower inventory and handling costs * Reduce costs from labor expense from remarking prices Disadvantages * Could damage current image (although it is weak) of offering high-quality merchandise * Requires 20.08% increase in sales volume to break even * Lowers gross profit margin to 26.2% * Additional costs for advertising to promote new pricing concept Quantitative Implications: 5% Price Decrease on ALL Categories | Category | Gross Profit Margin | VC | Price | 5% Decrease | Percentage of Sales | Weight GPM (5%) | Grocery (w/ dairy) | 30% | 70% | $1.00 | 27.42% | 50% | 13.71% | Meat/Poultry/Seafood | 18% | 82% | $1.00 | 14.78% | 20% | 2.96% | Produce | 30% | 70% | $1.00 | 27.42% | 18% | 4.93% | Seasonal & General Merchandise | 33% | 67% | $1.00 | 30.57% | 7% | 2.14% | Deli | 50% | 50% | $1.00 | 48.47% | 5% | 2.42% | | | | | | 100% | 26.2% | Alternative Two: Implement Everyday Low Pricing with 5% price decrease on Grocery, Seasonal & General Merchandise Advantages: * Combining these categories hits a high percentage of sales (57%) * These categories have high profit margins (30%, 33%) * Price conscience consumers will notice the different because it is what people are buying the most * We only lose 1.5% gross profit margin...
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...supplier for engines that power your snow blowers. The quote is as follows: Price Terms Distance Order quantity Weight Tooling Quality Failures Supplier 1 $90 2% 10 Net 45 200 1500 20 lbs $25000 3% Assume the following: Annual volume for engines is expected to be 90,000 units Inventory holding rate is 25% Cost to place an order is $100 Working capital costs are 12% Your freight rate is $1.75 per ton mile for a full truckload (40,000 lbs) and $2.00 for a less-thantruckload shipment There are 365 days in a year. Late-delivery costs should be ignored. What is the total cost of ownership for supplier 1? (Show your work.) 1 MGT301, Spring 2016 Assignment 4 – 25 Points Name_________________________ Question 2 A company using a weighted-criteria evaluation system has established these 3 categories for supplier evaluation and the appropriate weight are in parentheses: Quality(0.50), Technology(0.20), Cost(0.30). The scores for each category for Company A are: Quality(90), Technology(75), Cost(60) The scores for each category for Company B are: Quality(80), Technology(95), Cost(90) The scores for each category for Company C are: Quality(90), Technology(80), Cost(95) Calculate the weight score for each supplier? Which supplier would you consider your top supplier? Based on our discussion in class, what category would you place the suppliers? (Show your work.)...
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... | Case Study Discopress was the biggest manufacturer of recorded optical media which included CDs, Dvds and video games. The process for creating the disks regardless of the type was the same. Discopress started with mass manufacturing of disks. The preparation and expertise required to setup production of each title was significant and thus expensive compared to the marginal cost of production of each unit. Discopress later on added On Demand manufacturing of the disks, as technological advancement made it economical. This process required little or no setup overhead. The unit cost of the disk was higher because of higher variable costs like the cost of the blank disk. This process created a slightly inferior quality disks as compared to the mass production process. Because of minimal fixed cost, this process was a viable alternative for slow selling titles where slightly inferior quality was acceptable. A side by side comparison of the 2 processes follows –...
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...Journal #1: Quality Management Miché Jones Kaplan University MT435: Operations Management Professor Jason Jackson January 13, 2015 Journal #1: Quality Management Quality Tools Roberta S. Russell and Bernard W. Taylor III, authors of Operations and Supply Chain Management discussed quality tools and their importance to organizations. The authors conveyed that W. Edwards Deming, along with many other successful individuals who focused on quality, created an immense number of tools to discover the causes of quality issues. Fortunately, the tools are still being implemented by organizations today. The quality methods represent graphical techniques and consist of Pareto Charts, Process Flowcharts, Checksheets, Histograms, Scatter Diagrams, Statistical Process Control Charts, and Cause-and-Effect Diagrams. Russell and Taylor III clearly define the tools and their representation. Pareto Charts are designed for tallying the percentage of defects in which result from different causes to identify major quality issues; Process Flowcharts assist with focusing on where a quality issue may appear during a particular process; Checksheets demonstrate tallies of the number of defects for a list of problems that were discovered in the past; Histograms provide management with a frequency of data that is relevant to the quality problem; Scatter Diagrams identify "a pattern that may cause a quality problem" (Russell & Taylor III, 2014, p. 61); Statistical Process Control Charts consist...
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...were able to create efficiencies in cultivation and increase farm outputs leading to a greater production and more profitable business. In the recent times the French wine industry worked in tangent with government regulations to differentiate their wines e.g. they categorized their wine yards into five different categories based on quality of wine produced. The government’s strict policies to control the quality of wine produced led to the AOC laws that defined rigid boundaries and rigid standards for vineyards and wineries. This worked as an advantage for the industry as it segmented the wine market making it easier to identify wines and also prompted confidence amongst the consumers that wine are of high quality. This allowed the process of choosing wines easier and helped the customers to sort through the complexity of the highly fragmented market. The French wines industry was vulnerable for several reasons, firstly the restrictions and rigid standards that signified quality for the industry also led to lack of innovation and efficiencies within the industry and left them unable to compete with new world wines specially in the premium and super premium categories. Secondly the constant government interference controlling the way the industry operates also led to inflexibility, lack of experimentation and ultimately the decline in the variety of wines offered in the market. Thirdly the scarcity of land within France for grape cultivations and fragmentation of growers (average...
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...2. Cost Of Poor Quality (COPQ) 2.1 Introduction to COPQ COPQ is composed of costs, which are incurred by producing defective material. This cost consists of cost involved in perfecting the gap between desired and accrual product or service quality. It also includes the cost of lost opportunities due to loss of resources that generated in correcting the defects. Furthermore, labor cost, rework cost, disposition costs, and material costs that added to the fulfilling the product rejection are included in COPQ. Here is the figure shows the main components of COPQ Cost of inefficient processes Cost of nonconformities Cost of poor quality Cost of lost opportunities for sales Figure 2.1 components of COPQ 2.2 Why COPQ The reasons to estimate the cost of poor quality are multifold, including quantifying the cost of money generated by quality problems, identifying major opportunities for cost reduction, and verifying probabilities of reducing customer dissatisfaction and product salability threats. Additionally, measuring COPQ provides a means of evaluating the progress of quality improvement activities and knowing the cost of poor quality leads to the development of strategic quality plan that is consistent with overall organization of goals. 2.3 Categories of Quality Costs There are four general categories of costs concerning products’ quality. The Internal failure costs are the cost due to the deficiencies discovered before delivery, which are associated...
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...01/21/2013 Subject: cost quality relationship Cc: All department managers ‘Quality’ is the resounding word we hear from our customers. In today’s global market quality has great importance. Quality in a sense is the driving force behind our customer loyalty, the desire for quality products among our customers is in high demand. They desire products made to specification and rigorously checked for quality. Our goal is to produce the world’s best quality products. Quality standards- Provide our customers with the best quality humanly possible with an absolute 0% tolerance for substandard products. A. Any serious attempt to deal with quality issues must take into account the costs associated with quality. Those costs can be classified into three categories: appraisal, prevention, and failure (Stevenson & William 2008). Let us examine the preceding categories. B. Appraisal cost can be defined as the procedure or method to produce high quality products or find defect / flaws in the initial stage. Appraisal costs may include field testing, double blind surveys, close inspections, testing in controlled environments, and quality auditing. Prevention costs are related to attempts to prevent defects from occurring. They include costs such as planning and administration systems, working with vendors, training, quality control procedures, and extra attention in both the design and production phases to decrease the probability of defective workmanship. Failures costs can be internal...
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...HCS 325 Week 1 Individual Assignment Roles and Functions Paper Get Tutorial by Clicking on the link below or Copy Paste Link in Your Browser https://hwguiders.com/downloads/hcs-325-week-1-individual-assignment-roles-functions-paper/ For More Courses and Exams use this form ( http://hwguiders.com/contact-us/ ) Feel Free to Search your Class through Our Product Categories or From Our Search Bar (http://hwguiders.com/ ) Roles and Functions Paper Today’s health care needs a manager who has understanding of management and the skills needed to manage within the health care environment. This management refers to activities included in planning, organizing, leading and controlling of an organization. The manager must respond and adapt to the changes in an organization required by the needs of the patient population it serves. Managers must be accountable not only in decision-making, but productivity, cost containment, safety, confidentiality, etc. An effective manager must be accountable, create a quality work environment, and understand the value of a diverse workplace as well as other important functions that contribute to effective management. Although the roles of manager vary, all managers in any health care organization or any organization for that matter must manage effectively using the management process, being accountable for themselves and others, using the principles of effective time management, networking, recognizing and supporting the department...
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...8/448/8 Prevention costs are investments made to keep nonconforming products from occurring and reaching the customer, including the following specific costs: • Quality planning costs, such as salaries of individuals associated with quality planning and problem-solving teams, the development of new procedures, new equipment design, and reliability studies • Process control costs, which include costs spent on analyzing production processes and implementing process control plans • Information systems costs expended to develop data requirements and measurements • Training and general management costs, including internal and external training programs, clerical staff expenses, and miscellaneous supplies Appraisal costs are those associated with efforts to ensure conformance to requirements, generally through measurement and analysis of data to detect nonconformances. Categories of appraisal costs include the following: • Test and inspection costs associated with incoming materials, work-in-process, and finished goods, including equipment costs and salaries • Instrument maintenance costs due to calibration and repair of measuring instruments • Process measurement and control costs, which involve the time spent by workers to gather and analyze quality measurements Internal failure costs are incurred as a result of unsatisfactory quality found before the delivery of a product to the customer; some examples include the following: • Scrap and rework costs, including material...
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...and Porter's low cost/product differentiation categories? Are there inconsistencies between BCG and Porter and, if so, can you resolve them? (20%) Yellow Blue Red Porter’s framework Cost leadership Cost focus Differentiation focus BCG matrix Star Question mark Cow cash 1. Yellow clear rite dye Market segment of products is broad segment . And the products is identical products hence, the cost leadership can be appropriate category for this product. From the information of yellow dye, the market growth increase strongly from 1986-1993 but the market share of Monarch is slightly reduce from 50% to 49%. Hence, I would put this product into Star categories of BCG matrix 2. Blue clearbrite dye Light sensitive feature are the most important factor to consider but non light sensitive segment also can use this products. As a result, this products focus on broad segment. . Besides, the cost focus in important in this products line as Blue CB and Blue 79 have the same market share on 1990 even the feature of products are different .so it is clear that they focus on cost leadership about this products. BC maxtrix, the market share of Monarch is quite low 22% on 1993 while industry volume increase sharply . So this products can be classify as Question mark 3. Red clearbrite dye About this products, I believe red clearbrite dye is differentiation focus products as the scope of business is quite small for people who want to use high quality product regardless...
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...Quality Performance – Course Project 3 Name Institution Quality Performance – Course Project 3 Using the course work, it is imperative to understand further the issue facing Ever Event Hospital and measures of mitigating them. It is important to comprehend the cause of the poor quality of care with reagrds to the previous assignment analysis conducted in project-1 and 2. This will be achieved through building on the quality management plan created using the three steps of the Schwart’s Cycle—Do, Check, and Act. It is also crucial to develop balanced scorecard specific to the improvement plan through the description of performance measurement tools. Four categories of measurement will be created; both clinical and financial as well as description and justification of each. For every group, three specific measures will be established together with their calculation with respect to performance measurement as well as an explanation of performance change if the analysis is done for the entire organization. Moreover, during the discussion, there is a need to cover issues to be considered in the implementation of program improvement, collection and analysis of data, and description of desired results of the quality improvement plan. PART I Through the use of Schwart’s cycle checklist, it is possible for one to solve the issue faced within Ever Event Hospital by utilization of ‘Do,’ ‘Check,’ and ‘Act’ categories (Kizer, 2008). Schewart‘s PDCA cycle is usually used...
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