OM Exam 3 9-10

Quality

The ability of a product or service to consistently meet or exceed customer expectations

Deming Prize

Prize established by the Japanese and awarded annually to firms that distinguish themselves with quality management programs.

Shewhart

Control Charts; Variance Reduction

Deming

14 points; special vs. common causes of variation

Juran

Quality is fitness-for-use; quality trilogy

Feigenbaum

quality is a total field; the customer defines quality

Crosby

quality is free, zero defects

Ishikawa

Cause-and-effect diagrams; quality circles

Taguchi

loss function

Ohno and Shingo

Continuous improvement

1. Design
2. How well the product or service conforms to the design
3. Service after delivery

What are the three determinants of quality?

Quality of design

Intention of designers to include or exclude features in a product or service

Quality of conformance

The degree to which goods or services conform to the intent of the designers

loss of business, liability, productivity, costs

What are four consequences of poor quality?

Appraisal Costs

Costs of activities designed to ensure quality or uncover defects

Prevention Costs

costs associated with preventing defects before they happen

Failure costs

costs caused by defective parts or products or by faulty services

Internal Failures

failures discovered during production

External Failures

failures discovered after delivery to the customer

Return on quality

an approach that evaluates the financial return of investments in quality

Baldrige Award

Annual award given by the U.S. government to recognize quality achievements of U.S. companies.

European Quality Award

European award for organizational excellence

ISO 9000

Set of international standards on quality management and quality assurance, critical to international business

ISO 14000

A set of international standards for assessing a company's environmental performance

ISO 24700

A set of international standards that pertains to the quality and performance of office equipment that contains reused components.

Total Quality Management (TQM)

A philosophy that involves everyone in an organization in a continual effort to improve quality and achieve customer satisfaction.

Fail-safing

incorporating design elements that prevent incorrect procedures

Continuous Improvement

Philosophy that seeks to make never-ending improvements to the process of converting inputs into outputs

Kaizen

Japanese term for continuous improvement

Quality at the source

The philosophy of making each worker responsible for the quality of his or her work.

PDSA (Plan-Do-Study-Act)

A framework for problem solving and improvement activities

Six Sigma

A business process for improving quality, reducing costs, and increasing customer satisfaction

Flowchart

A diagram of the steps in a process

Check Sheet

a tool for recording and organizing data to identify a problem

Histogram

a chart of an empirical frequency distribution

Pareto Analysis

technique for classifying problem areas according to degree of importance, and focusing on the most important

Scatter Diagram

a graph that shows the degree and direction of relationship between two variables

Control Chart

a statistical chart of time-ordered values of a sample statistic

Cause-and-effect diagram

A diagram used to search for the cause(s) of a problem; also called fishbone diagram.

Run Chart

tool for tracking results over a period of time

Quality Control

A process that evaluates output relative to a standard and takes corrective action when output doesn't meet standards

Random Variation

Natural variation in the output of a process, created by countless minor factors

Assignable Variation

In process output, a variation whose cause can be identified. A nonrandom variation

Central Limit Theorem

the distribution of sample averages tends to be normal regardless of the shape of the process distribution

Control Limits

the dividing lines between random and nonrandom deviations from the mean of the distribution

Type 1 Error

concluding a process is not in control when it actually is

Type 2 Error

concluding a process is in control when it is not

Variables

generate data that are measured

Attributes

generate data that are counted

Run Test

A test for patterns in a sequence

Run

Sequence of observations with a certain characteristic

Specifications

a range of acceptable values established by engineering design or customer requirements

Process Variability

natural or inherent variability in a process

Process Capability

the inherent variability of process output relative to the variation allowed by the design specification

Capability Index

used to assess the ability of a process to meet specifications