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Associated with preventing defects before
they happen
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Prevention
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Incurred when the firm assesses the level
of performance of its processes
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Appraisal
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Result from defects that are discovered during the production of a product or service. Can fall into two categories rework and scrap
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Internal failure costs
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Incurred if some aspect of a service must be performed again
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Rework
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Incurred if a defective item is unfit for further processing
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Scrap
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Arise when defect is discovered after the customer receives the product/service
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External failure costs
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Stresses three principles for achieving high levels of process performance and quality
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Total Quality Management (customer satisfaction, employee involvement, and continuous improvement)
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Process that produced the P/S that are really being judged
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Customer satisfaction
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A process's inability to meet certain advertised or implied performance standards
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Process failure
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How well P/S serves its intended purpose at a price customers willing to pay
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Value
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Good product support can reduce the consequences of quality failures
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Support
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Atmosphere, image, or aesthetics
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Psychological impressions
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Challenge of quality management is to instill an awareness of the importance of quality in all employees ad to motivate them to improve it
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Cultural involvement
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(Deming Wheel) used by firms actively engaged in continuous improvement to train their work teams in problem solving
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Plan-do-check-act cycle
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P/S characteristics, such as weight, length, volume or time that can be measured
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Variable measurements
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