...Future success is cannot guarantee by the past success. If we wanted to maintain our success, the control is needed. ‘Control is initiated when there are unwanted deviations in a system or when performance needs to be corrected, the literature does not directly address the conditions that favor the initiation of control.’ (Green & Welsh, 1988, p.292) Control not only is an after-the-fact process; it also is a preventive measures. Williams &McWilliams (2009) have stated that, control is a managing process of building a standard to achieve objective, collating actual with standards performance and adopting corrective actions when necessary. An achievement of control is when behavior and work procedures accord to standards and accomplishment of company goals. The basic control process is categorizing into four steps. The first step is establishing a clear standard. In the process of business, in order to measure the extent to which organizational performance is satisfactory or not, standard is a basic of comparison. A good standard, it must enable goal achievement, listen to customers’ comments, suggestion and complaints and benchmarking other companies. Steingraber (1990) stated that different people usually assume the planning and control responsibility, so the importance of the control process is to establish the standards. The second step is comparing actual performance to performance standards. Comparisons of actual performance with the standards performance are very important...
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...Process Control at Polaroid EXECUTIVE SUMMARY The Polaroid case emphasizes the importance of quality and process control procedures. Materials represented the majority (2/3) of manufacturing costs at the R2 plant. This fact alone reflects that quality control, yield maximization and minimization of scrap were crucial at the plant and for Polaroid as a whole. Undoubtedly, internal failure costs (scrap, rework, process failure) and external failure costs (customer complaints, product return, lost sales) can be extremely significant in this industry. By 1984, there was intense pressure to limit and reduce costs, thus giving rise to the implementation of Project Greenlight. The objective was to reduce quality monitoring costs, while maintaining or improving product quality. By instituting statistical process control procedures, production would be capable of manufacturing product within specifications and of a more consistent quality. Results of sampling identified an issue with finger height process average. Under the project, this would call for shut down, maintenance/recalibration and new control limits. While it can take some time for all personnel to develop the proper skill set and trust of fellow employees to fully utilize SPC, the end result will provide less scrap, higher yields and more consistency of product. ANALYSIS & CASE QUESTIONS 1. What is the magnitude of cost of quality problems at the R2 plant? How effective were its past procedures...
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...Statistical Process Control is a statistical procedure using control charts to detect and prevent poor quality of production. It is achieved by taking periodic samples from the process and plotting these sample points on a chart to see if the process is within statistical control limits. When a company is about to conduct SPC, they should train the employees on a continuing basis. SPC is a tool individuals can use to monitor production process for the purpose of making improvement. So employees have their own responsibilities for their own operation. The quality of a product itself can be evaluated using attribute of the product and variable measures. Attribute is a product characteristic that can be evaluated with a discrete response such as texture, color, taste. Variable measure is a product characteristic that is measured on a continuous scale such as length, weight, temperature, or time. Meanwhile, SPC for service process tend to use the quality characteristic and measurement such as customer satisfaction and time. Control charts are graphs that establish the control limit of a process and to monitor the process to indicate when it is out of control. The quality measures used in attribute control charts are discrete values reflecting a simple decision criterion. P – Chart uses the proportion of defective items in a sample as the sample statistic . C- Chart is used when it’s not possible to compute a proportion defective and the actual number of defects must be used. Variable...
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...CASE STUDY 5: Statistical Process Control Ikrom Abdullaev M0158958 Shamil Tlukashaev Chuan Lai Exercise A: Control Charts for Variables Step 1: Gather data Four samples of five observations (launches) each were arranged in tabular form. The mean and range for each sample determined and computed the mean of the means and the mean of the ranges. Data Table SampleNumber | Observation 1 2 3 4 5 | SampleMean x | Sample Range R | 1 | 7.2 | 8.1 | 8 | 8.5 | 9.2 | 8.20 | 2 | 2 | 8.4 | 8.2 | 7.6 | 9.3 | 10.1 | 8.72 | 2.2 | 3 | 10 | 9.1 | 7.4 | 7.9 | 9.4 | 8.76 | 2.6 | 4 | 10.1 | 9.2 | 7.8 | 7.3 | 10.4 | 8.96 | 3.1 | 2.475 2.475 8.66 8.66 (8.20+8.72+8.76+8.96)/4=8.66 (8.20+8.72+8.76+8.96)/4=8.66 (2+2.2+2.6+3.1)/4=2.475 (2+2.2+2.6+3.1)/4=2.475 Step 2: Develop an R-chart Using the data gathered and the appropriate and values, we computed the upper and lower three-sigma control limits for the range. Because the average range for Ｒis 2.475, to compute we used value for =2.115 according to the table given in the book. =2.115(2.475) =5.234 The result we got is 5.234 To compute we used formula given below =0(2.475) =0 According to table given in the book we already know that =0. So for now we know that =2.115(2.475) =5.234 =0(2.475) =0 We drew an R-chart, after we have tabulated all the numbers in the tables and equations...
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...Relationship between Internal Controls and the Audit Process Internal controls are the policies, practices, procedures, and processes that management implements in order to ensure the accuracy and fairness of the information recorded in company financial statements. Traditional management practice has been to define a performance expectation and monitor employee performance for deviations from established performance standards. Traditional auditing has also followed this management practice with regard to internal controls. Auditing traditionally has involved reviewing and testing established policies, practices, procedures, and processes for evidence of non-compliance. The result of this type of auditing is that the auditor effectively becomes the internal control cop. Although the auditor may be effective at finding deviations from the current internal control scheme, the auditor provides little value beyond that to the client. Modern management philosophy deviates from the traditional philosophy in choosing to focus on the positive of the employee relationship by inspiring employees to greater heights rather than setting a bar and punishing employees who fail to reach the bar. Auditing is most beneficial to the client when it follows the same path. Attestation where an auditor offers an opinion as to the quality of the existing financial statements is only one area that an auditor performs (Hayes, Dassen, Schilder, & Wallage, 2005). When auditors realize that...
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...Altoona wishes to capture the available 30-35% market share their forecasts predict. Second, the two major problems involved in the coating process (dirt and pocking) have made the coating process itself inconsistent and unpredictable. At least half of all defects occur in the coating process. In 61 samples of 300 units, the mean defective rate for dirt was just under 5% and 3.5% for pocking. Quantitatively, there are also two main issues: First, the one attribute that is critical to quality in the eyes of the customer, visual inspection, varies too greatly. It has become a costly and frustrating quality measure for both customers and Altoona. Second, employee, specifically engineers’, time is being mismanaged and resulting in forgotten projects, needless wage expenditure, and difficulty with experimentation. Together, these four problems will be counteracted with a quality management system that utilizes and builds on the current SQC initiative where the goal of getting dirt defects to fewer than 4% can be realized. The quantitative issues referred to above will also be addressed with appropriate project design plans and stable operations. Altoona currently faces problems with standards of certain dimensions of quality. To isolate three of these dimensions individually is critical – especially to the success of the coating process. These dimensions are:...
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...responsible for the control chip, has had an on time delivery rate of 82%. The keyless entry fobs cannot began the final stages of production until all components have been received by the Kendall Group. Due to the amount of units ordered from each supplier, Kendall Group has been able to meet client demands. However, the Vietnam suppliers threaten to cause a bottleneck should demand increase, as the control chips’ untimely receipt would temporarily halt operations. Systems Controls The Kendall Group applied the efficiency metric to initially determine if the global suppliers had the resources to manufacture and ship the parts in the allotted time. The Vietnam business partner has proven that the efficiency metric failed to consider other factors that could create delays in shipping the control chips. The Kendall Group plans to meet with the Vietnam supplier to understand the factors that contribute to the delay in shipping the product. The company is considering transferring two operations managers to improve the Vietnam suppliers on time shipping statistics. Cultural Business Factors Cultural differences and standards will have a significant influence in international business relationships. The Kendall Group will need to educate company leaders on the cultural norms and business practices in Vietnam (as well as the other countries) to support a solid foundation of communication and expectations from both Kendall Group and the supplier. Process Controls One of the...
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...Change control Change control is one of the more important subjects of the business world today. With the ability to transfer information at (nearly) the speed of light, competition can be fierce. In a competitive business environment, there is tremendous pressure to be one step ahead of (or to rush quickly to catch up to,) the competition. This is especially true in industries where technology is the main source of business. Even where it’s not, almost every company has a Web site now. The temptation to make changes to these production environments can be great, and management can and will often pressure people to make the change happen now. This is why change control is important. Information security and business continuity while continuing to offer the highest-quality product should be the goals of any information technology group at a very high level. Sometimes, though, one can buckle to the pressure of management or simply decide to change something in a way he or she thinks better. While this may be true at the laser-point level of that particular module, application, Web page, etc., the real problem exists in how the change cascades down to other items. That is to say, the one small change made to item “a” may have a trickle-down effect and break seemingly unrelated item “z” or even reporting somewhere. If this breaks financial reporting, anything from auditing to bankruptcy is possible. It can even create a legal situation because a product or...
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...operations security identifies the controls for? A. Software B. Hardware C. Media D. All of the above are resources. Answer: D Reference: Introduction Difficulty: moderate 2. A control that makes certain no one person has excessive privileges is: A. Separation of duties B. Principle of least privilege C. Need-to-know D. Individual privilege Answer: A Reference: Operations Security Principles Difficulty: moderate 3. A minimum set of access rights needed to perform a specific job description is: A. Separation of duties B. Need-to-know C. Privileged-controls D. Separation-of-privilege Answer: B Reference: Operations Security Principles Difficulty: moderate 4. Which of the following is NOT a key element of a system of internal and security controls? A. Employ competent people B. Have adequate separation of job duties C. Execute internal and external transactions D. Maintain adequate documents and records Answer: C Reference: Operations Security Principles Difficulty: moderate 5. Which of the following is a fundamental reason why separation of duties is important? A. People are an integral part of operations process B. People have shortcomings C. Both A and B D. None of the above Answer: C Reference: Operations Security Principles Difficulty: moderate 6. People engage in fraud, theft, or malicious activities for all of the following reasons except: A. Some financial crises motivates them B. They can justify their actions C. Internal controls are not in place D. All of the above...
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...Budgetary control is the process by which financial control is exercised by managers preparing budgets for revenue and expenditure for each function of the organization in advance of an accounting period. It involves the continuous comparison of actual performance against the budget to ensure the plan is achieved or to provide a basis for its revision. The first disadvantage of budgetary control system is costly. The costs of compiling data and analyzing budgets are another disadvantage of the budgetary control process. Other forms of corporate control rely more directly on the opinions and judgment of senior officials. Budgetary control seeks to moderate this type of human judgment by introducing quantitative arguments, all of which come at a cost. When a business uses its existing operating budgets and financial statements to perform budgetary control, the cost is reduced. However, when leaders commission new financial reports, these costs rise, especially if they require hiring new employees to assist the accounting department. Another disadvantage of budgetary control is that it relies heavily on numerical data, sometimes at the expense of other useful information. For example, a department head who operates under her budget for the quarter may appear successful in a budgetary control analysis. However, if she saved money by reducing her staff and terminating skilled workers, the action may have a more negative, intangible effect on the business as a whole. Decisions...
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...Executive summary PROJECT SCOPE The purpose of this project is to meet up with some of the challenges faced by financial institutions, especially the banking industry. It is quite evident that the banking industry is witnessing a revolution in products, processes, market, and regulations. Unfortunately, it is a revolution that is not about to stop or slow down. Today’s marketplace is fast moving and extremely competitive. The need to retain existing customers and attracting new ones often conflicts with the need to reduce cost and improve efficiency. Most banks, in order to adapt to the changes, are embracing technologies that will improve customer service as well as minimize cost. This is our yardstick to focusing on the strategic goals of the industry by using technology that combines information system with peoples’ activity and also support operations, management, and decision making. PROJECT OBJECTIVES The intent of the project is to design banking solution software that will give a competitive advantage required in today’s business environment such that it enables both the private and commercial banks to provide a comprehensive range of online banking services to their clients. MAJOR CONTRIBUTORS The success of the project is the outcome of different teams working together to meet with our client’s strategic goals and core competencies. Two divisions were created in a project matrix form to match the urgency and importance of the project. Project priority...
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...the four-step control process outlined in the chapter. Step 1: Establish the standards of performance, goals, or targets against which performance is to be evaluated. Chick-fil-A established the standards by holding focus groups to understand what customers wanted in grilled chicken. Their goal was to improve their chicken and their target was to make significant profit with the new grilled chicken. Step 2: Measure actual performance By having a focus group, Chick-fil-A was able measured the actual performance needed to improve their grilled chicken. Chick-fil-A created a prototype grill in a lab and had test tasting. Step 3; Compare actual performance against chosen standards of performance. In step three, Chick–fil-A evaluated hundreds of grilled chicken recipes and narrowed down the flavor profile. Step 4: Evaluate the result and initiate corrective action if the standard is not being achieved. After a seven year process, Chick-fil-A spent over 50 million dollars to create their new grilled chicken. The 50 million dollars included “new automated” grills. Chick-fil-A is evaluating how well in profit their new grilled chicken does versus the 7 percent they were previously making in sales with the chargrilled sandwich. If sales go well, the company is considering adding a second grill and removing fryers. 2. The goal of Chick-fil-A’s new chicken items is to improve the company’s image for healthful food. How can the company use clan control to help its employees...
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...Italian Quality: Campagnolo Bicycle Components Introduction Campagnolo is renowned for producing some of the most innovative, highest quality, and best performing bicycle components available today. They also provide a benchmark for original design as evidenced by winning the prestigious Compasso d’Oro award from the Associazone Design Italiano and has been recognized by the Wall Street Journal as one of the most prominent sports brands in the world. ‘This reputation has been earned not only through its countless racing successes, but also by virtue of the attention given to quality and to service that sets this company apart from all others.’ ("Focus," 2011, para. 6) Tullio Campagnolo, an amateur bicycle racer who was frustrated with current technology to change gearing on his bicycle, founded Campagnolo S.r.l in Vicenza, Italy in 1933. At the time, changing gears required the rider to dismount, remove the rear wheel and then flipping the rear wheel around so a different sized cog on the opposite side of rear wheel could be used, then reattach the wheel to the bicycle frame, and finally remount the bicycle and resume the race. This required tools and a bit of time off the bicycle to complete as derailleurs and quick releases had not yet been invented. Tullio Campagnolo spent three years designing, perfecting, and producing what has become one of the ubiquitous components on a modern bicycle – the quick release skewer. ‘The company soon expanded, focusing on the three...
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... What control strategy is appropriate with Barings Bank situation? II. Objectives Find the right control strategy model for Barings Bank to prevent another mismanagement of the bank. III. Areas of considerations/Assumptions A. Areas of considerations a. Corporate culture b. Financial c. Decision-Making d. Leadership / management e. External/Internal environment B. Assumptions a. The Bank’s top officials gives a free-hand to Mr. Leeson to manage the affairs of their Singapore branch b. Mr. Leeson is a great manipulator. c. Top Officials of Barings Bank knows the real situation (financial) in their Singapore branch d. Mr. Leeson gives a lot of money to Baring’s Top Official. IV. Theoretical Framework Financial Control Management of Financial performance that measures the following: a. Liquidity b. Leverage c. Asset management d. Profitability Financial ratios are ratios are useful for historical comparisons within barings banking firm and for external benchmarking. Financial budgets or goals are to be shared with employees and tracked to indicate success or failure in their accomplishment. Internal and External Control A. Self- Control The potential...
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...Questions: 1Introduction to OM: OM Q&A -1 9/26/2013 1) Identify three or more operations-related tasks carried out by Hard Rock Café. (Far East department) Answer: Providing custom meals; designing, testing, and costing meals; acquiring, receiving , and storing supplies; recruiting and training employees; preparing employee schedules; designing efficient restaurant layouts. 2) Identify two operations-related tasks carried out by Hard Rock Café (changed to McDonalds). Match each to its area of the Ten Critical Decisions. Answer: Providing custom meals–design of goods and services; designing, testing, and costing meals–design of goods and services; acquiring, receiving , and storing supplies–supply- chain management; recruiting and training employees–human resources , job design and work measurement; preparing employee schedules–intermediate and short-term scheduling; designing efficient restaurant layouts–layout strategy. 3) Define operations management. Will your definition accommodate both manufacturing and service operations? Answer: Operations management can be defined as the management of all activities directly related to the creation of goods and/or services through the transformation of inputs into outputs. Yes. 4) Why are services typically more difficult to standardize, automate, and make efficient? Answer: Services typically require customer interaction, which makes it difficult to standardize, automate...
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