Chapter 15Quality Management

TRUE/FALSE
1. W. Edwards Deming's success in Japan was his ability to teach quality specialists rather than upper
management.
ANS: F

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2. Quality management includes how goods and services are designed, rather than simply how quality is
assured during the manufacturing or service delivery process.
ANS: T

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3. Both consultants and business professionals now agree on a universal definition of quality.
ANS: F

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4. The most relevant definition of quality for an operations manager is "conformance to specifications."
ANS: T

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5. "Fitness for use" relates to how well quality meets design targets and tolerances.
ANS: F

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6. Performance standards in services are analogous to manufacturing specifications.

ANS: T

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7. Empathy relates to the "knowledge and courtesy of service providers and their ability to convey trust
and confidence."
ANS: F

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8. The Deming philosophy focuses on bringing about improvements in product and service quality by
reducing uncertainty and variability in goods and services design and associated processes.
ANS: T

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9. W. Edward Deming believed that productivity would improve by setting numerical quotas.
ANS: F

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10. W. Edward Deming believed that higher quality leads to higher costs, but to even higher market share.
ANS: F

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11.Joseph Juran preached the "14 Points" for management in his quality philosophy.
ANS: F

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12. To get top management's attention about quality issues, it is useful to measure quality in monetary
terms rather than from the operational perspective on the number of defects and nonconformances.
ANS: T

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13. Zero defects is achieved by identifying defects in production processes and fixing them.
ANS: F

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14. The Gap Model helps managers to link quality management practices within the value chain to
customer expectations.
ANS: T

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15. ISO 9000 definition of quality system standards is based on the premise that certain generic
characteristics of management practice can be standardized and that a well-designed, wellimplemented and carefully managed quality system provides confidence that the outputs will meet
customer expectations and requirements.
ANS: T

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16. ISO 9000 is best used by firms with mature quality systems as a means of refining their quality
practices.
ANS: F

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17. ISO 9000 is mainly used in the United States.

ANS: F

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18. Six Sigma quality is based on a statistical measure that seeks to achieve at most 3.4 errors or defects
per million opportunities.
ANS: T

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19. Corporate sponsors who support Six Sigma activities are typically called "black belts."
ANS: F

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20. In the define phase of the Six Sigma DMAIC problem-solving approach, teams identify critical to
quality (CTQs) characteristics considered by the customer to have the most impact on quality.
ANS: T

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21. Because of the expense and training involved, Six Sigma is practical only in large manufacturing
organizations.
ANS: F

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22. The cost of quality refers to the out of pocket costs that customers incur if they receive a poor quality
good or service.
ANS: F

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23. The costs associated with maintaining measurement instruments would be an example of appraisal
costs.
ANS: T

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24. Costs of recalls and warranty claims are classified as internal failure costs.
ANS: F
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25. The seven QC tools are designed to be simple so that workers at all levels can use them.
ANS: T

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26. A control chart is quality-control jargon for an ordinary run chart that plots data over time.
ANS: F

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27. Using a cause-and-effect diagram helps identify the most likely causes of a problem so that further
data collection can be carried out.
ANS: T

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28. A Pareto diagram helps to understand the relationships between two variables and to verify possible
cause and effect hypotheses.
ANS: F

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29. In the act stage of the Deming cycle, improvements become standardized and the plan is implemented
as a "current best practice" and communicated throughout the organization.
ANS: T

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30. Because of the amount of resources required, a Kaizen blitz is generally performed outside of normal
working hours over several weeks or months.
ANS: F

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31. Using color coded wires to reduce mistakes associated with assembling complex electronic products is
an example of poka-yoke.
ANS: T

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32. In Six Sigma terminology, a defect is any mistake or error that is passed on to the customer.
ANS: T

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MULTIPLE CHOICE
1. Which one of the following statements is false?
a. Kaizen is the process of specifying design specifications for goods and services.
b. A cause-and-effect diagram is also called a fishbone diagram.
c. Scrap and rework costs are part of internal failure quality costs.
d. The Deming Cycle is named after a famous quality guru and consists of four steps Plan,
Do, Study, Act (PDSA).
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ANS: A

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2. The recognized benchmark for Six Sigma implementation is

a. Sears, Roebuck and Co.
b. DuPont
c. General Electric
d. American Express
ANS: C

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3. Root cause analysis uses all of the following tools and methods except
a. Zero Defects
b. Seven Quality Control Tools
c. 5-Why Technique
d. DMAIC
ANS: A

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4. The dpmo or epmo for a three-sigma quality level is

a. 66,807
b. 6,210
c. 233
d. 3.4
ANS: A

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5. In applying Six Sigma to services, the four key measures of performance include all of the following
except
a. accuracy
b. empathy
c. cost
d. customer satisfaction
ANS: B

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6. Six Sigma efforts have use all of the following concepts and methods except
a. Process control such as reducing variation
b. Process improvement such as mistake proofing
c. Critical to quality characteristics such as appraisal costs
d. Advanced statistical tools such as multiple regression
ANS: C

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7. Which of the following is true regarding the history of quality management?

a. During the Industrial Revolution, workers on the shop floor began to take on increased
responsibility for quality.
b. Six Sigma was developed in Japan as a cost reduction approach during the 1970s.
c. Deming's diagram of a value chain emphasized the importance of consumers and suppliers
in supporting continuous quality improvement.
d. Beginning around 1950, Deming and Juran began educating top U.S. managers, which
lead to the growth and development of quality management in the U.S.
ANS: C

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8. Which of the following describes the quality definition of fitness for use?

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a.
b.
c.
d.

Perfection and consistency in goods and service quality

Doing it right the first time
Conforming to design specifications
The ability of a good or service to meet customer needs

ANS: D

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9. In the SERVQUAL instrument for measuring service quality, the concept of assurance is associated
with
a. The ability to convey trust and confidence
b. Caring and individualized attention
c. Always providing consistent service
d. Performing a service quickly and on time
ANS: A

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10. Which leader in quality management promoted the Quality Trilogy of quality planning, quality control,
and quality improvement?
a. W. Edwards Deming
b. Joseph Juran
c. Philip Crosby
d. Jack Hillerich
ANS: B

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11. All of the following are components of the GAP model except
a. The discrepancy between delighting or pleasing customers and total customer service and
satisfaction
b. The discrepancy between management's perceptions of what features constitute a target
level of quality and the task of translating these perceptions into executable specifications
c. The discrepancy between quality specifications documented in operating and training
manuals and plans and their implementation
d. The difference between the customer's expectations and perceptions
ANS: A

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12. Which of the following is not considered part of Total Quality?

a. A focus on the customers and stakeholders
b. A process focus
c. Participation and team work
d. Six Sigma
ANS: D

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13. Which of the following is not directly related to W. Edwards Deming?

a. Quality leads to a sustainable market
b. Quality is free
c. Higher quality leads to higher productivity and lower cost
d. Plan, Do, Study, Act
ANS: B

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14. Which of the following is not one of W. Edwards Deming's 14 points?

a. Create a vision and demonstrate commitment
b. Stop making decisions purely on the basis of cost
c. Eliminate exhortation
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d. The only performance standard is Zero Defects

ANS: D

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15. Which of the following is not a part of Philip Crosby's philosophy of quality?
a. Quality means conformance to requirements not elegance
b. The only performance standard is Six Sigma
c. There is no such thing as a quality problem
d. The only performance measurement is the cost of quality, which is the expense of nonconformance
ANS: B

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16. ISO 9000:2000 principles consist of all of the following except

a. Involvement of people
b. Mutually beneficial supplier relationships
c. Zero defects
d. System approach to management
ANS: C

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17. Which of the following emphasizes defects per million opportunities as a key measure of quality?
a. The 14 Points
b. ISO 9000:2000
c. The Gap model
d. Six Sigma
ANS: D

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18. All of the following relate to Six Sigma except

a. Clear financial returns
b. Use of PDSA problem solving approach
c. Output critical to customers
d. A stretch goal
ANS: B

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19. Which does not fit with Six Sigma implementation?

a. Emphasizing critical-to-quality characteristics
b. Focusing on corporate sponsor to support team-activity
c. Creating quality system standards
d. Extensive training of employees in various tools
ANS: C

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20. GE's Six Sigma problem solving approach employs five phases. Which is not one of the phases?
a. Define (D)
b. Measure (M)
c. Analyze (A)
d. Improvise (I)
ANS: D

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21. In reference to quality cost classifications, training and equipment design would fall in the ____
category.
a. Prevention

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b. Appraisal
c. Internal-failure
d. External-failure
ANS: A

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22. Machine down time and downgrading costs are examples of which type of quality cost?
a. Prevention
b. Appraisal
c. Internal-failure
d. External-failure
ANS: C

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23. A tool to help determine how a process works and what it is supposed to do is a
a. Run chart
b. Cause-and-effect diagram
c. Scatter diagram
d. Flowchart
ANS: D

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24. A tool to help focus on the most significant problems is

a. Flow-charts
b. Pareto analysis
c. Cause-and-effect diagram
d. Scatter diagram
ANS: B

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25. Cause-and-effect diagrams would help most in which phase of the DMAIC problem-solving approach?
a. Define
b. Measure
c. Analyze
d. Control
ANS: C

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26. At a gas station, a diesel pump nozzle that will not fit into a non-diesel automobile is an example of
____?
a. Kaizen blitz
b. dpmo
c. Poka-yoke
d. External failure
ANS: C

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SHORT ANSWER
1. Discuss different ways of defining quality and how these differ for goods and services.
ANS:

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One definition is fitness for use the ability of a good or service to meet customer needs. From an
operations perspective, however, the most useful definition is how well the output of a manufacturing
or service process conforms to the design specifications. Quality of conformance is the extent to
which a process is able to deliver output that conforms to the design specifications. Service quality is
consistently meeting or exceeding customer expectations (external focus) and service delivery system
performance criteria (internal focus) during all service encounters.
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2. List the three principles of total quality and why they are important.
ANS:
The principles of total quality are
1.
A focus on customers and stakeholders
Customers are the principal judges of quality and therefore, it is important to understand
their needs and expectations.
2.
A process focus supported by continuous improvement and learning
A process focus ensures that organizations understand the interdependency among
inputs, process and outputs, and also the roles of consumers and suppliers in designing
and managing systems.
3.
Participation and teamwork by everyone in the organization
When managers give employees the tools to make good decisions and the freedom and
encouragement to make contributions, better quality goods and services will result.
Teamwork encourages the involvement of everyone in attacking systemic problems,
particularly those that cross functional boundaries.
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3. Summarize the philosophies of Deming, Juran, and Crosby, highlighting the key points on which they
agree and on which they differ.
ANS:
Deming never defined or described quality precisely. In his last book, he stated, "A product or a
service possesses quality if it helps somebody and enjoys a good and sustainable market." The Deming
philosophy focuses on bringing about improvements in product and service quality by reducing
variability in goods and services design and associated processes. Deming professed that higher
quality leads to higher productivity and lower costs, which in turn leads to improved market share and
long-term competitive strength. Deming also advocated a process to guide and motivate improvement
activities, Plan-Do-Study-Act, which has become known as the Deming cycle.
Juran proposed a simple definition of quality: "fitness for use." Unlike Deming, however, Juran did not
propose a major cultural change in the organization, but rather sought to improve quality by working
within the system familiar to managers. He argued that employees at different levels of an organization
speak in their own "languages." Juran stated that top management speaks in the language of dollars;
workers speak in the language of things; and middle management must be able to speak both
languages and translate between dollars and things. Thus, to get top management's attention, quality
issues must be cast in the language they understand dollars. Hence, Juran advocated the use of
quality cost measurement, discussed later in this chapter, to focus attention on quality problems. At the
operational level, Juran focused on increasing conformance to specifications through elimination of
defects, supported extensively by statistical tools for analysis. Thus, his philosophy fit well into
existing management systems.

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The essence of Crosby's quality philosophy is embodied in what he calls the Absolutes of Quality
Management and the Basic Elements of Improvement. Crosby's Absolutes of Quality Management
include the following points:
Quality means conformance to requirements, not elegance. Requirements must be

clearly stated so that they cannot be misunderstood.

There is no such thing as a quality problem. Problems are functional in nature. Thus, a

firm may experience accounting problems, manufacturing problems, design problems,

front-desk problems, and so on.
There is no such thing as the economics of quality; doing the job right the first time

is always cheaper. Quality is free. What costs money are all actions that involve not doing
jobs right the first time.
The only performance measurement is the cost of quality, which is the expense of

nonconformance. Quality cost data are useful to call problems to management's attention,
to select opportunities for corrective action, and to track quality improvement over time.
The only performance standard is "Zero Defects (ZD). This simply represents the

philosophy of preventing defects in goods and services rather than finding them after the
fact and fixing them.
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4. The GAP model recognizes five ways to mis-specify and mismanage the creation and delivery of high
levels of quality. Describe each of the five problem areas (GAPS).
ANS:
Gap 1:

Gap 2:

Gap 3:

Gap 4:

Gap 5:

The discrepancy between customers' expectations and managements'

perceptions of those expectations. Managers may think they understand why
customers buy a good or service but if their perception is wrong, then all
subsequent design and delivery activities may be mis-directed.
The discrepancy between managements' perceptions of what features
constitute a target level of quality and the task of translating these perceptions
into executable specifications. This represents a mismatch between requirements
and design activities.
The discrepancy between quality specifications documented in operating and
training manuals and plans and their implementation. Gap 3 recognizes that
manufacturing and service delivery systems must execute quality specifications
well.
The discrepancy between the actual performance of manufacturing and
service delivery systems and external communications to the customers.
Customers should not be promised a certain type and level of quality unless the
delivery system can achieve or exceed that level.
The difference between the customer's expectations and perceptions. Gap 5
depends on the other four problem areas because this is the area in which the
customer judges quality and makes future purchase decisions.

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5. Describe the rationale underlying ISO 9000:2000.
ANS:

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ISO 9000 defines quality system standards, based on the premise that certain generic characteristics of
management practices can be standardized and that a well-designed, well-implemented, and carefully
managed quality system provides confidence that the outputs will meet customer expectations and
requirements. The standards prescribe documentation for all processes affecting quality and suggest
that compliance through auditing leads to continuous improvement. The standards are intended to
apply to all types of businesses, including electronics and chemicals, and to services such as health
care, banking, and transportation. In some foreign markets, companies will not buy from suppliers who
are not certified to the standards.
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6. Define Six Sigma and explain the key concepts used to implement a Six Sigma quality initiative.
ANS:
Six Sigma is a business improvement approach that seeks to find and eliminate causes of defects
and errors in manufacturing and service processes by focusing on outputs that are critical to
customers and results in a clear financial return for the organization.
The key concepts used to implement a Six Sigma quality initiative should address the following.
1.
Emphasizing dpmo or epmo as a standard metric that can be applied to all parts of an
organization: Manufacturing, engineering, administrative, software, etc.
2.
Providing extensive training followed by project team deployment to improve
profitability, reduce non-value-added activities and achieve cycle time reduction
3.
Focusing on corporate sponsors responsible for supporting team activities, helping to
overcome resistance to change, obtaining resources and focusing teams on overall
strategic objectives
4.
Creating highly qualified process improvement experts (green belts, black belts and
master black belts) who can apply improvement tools and lead teams
5.
Ensuring that appropriate metrics are identified early in the process and that they focus
on business results
6.
Setting stretch objectives for improvement
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7. Explain the four components of the cost of quality.
ANS:
Quality costs can be organized in the following four major categories.
Prevention Costs are costs expended to keep non-conforming goods and services from

being made and reaching the customer.

Appraisal Costs are costs expended on ascertaining quality levels through measurement

and analysis of data to detect and correct problems.

Internal-Failure Costs are costs incurred as a result of unsatisfactory quality that is found

before the delivery of a good or service to the customer.

External-Failure Costs are costs incurred after poor quality goods or services reach the

customer.
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8. What are the 7 QC Tools and what value are they for quality improvement? Briefly explain how each
tool is used.
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The Seven QC Tools are flowcharts, run and control charts, checksheets, histograms, Pareto diagrams,
cause-and-effect diagrams, and scatter diagrams. The Seven QC Tools are designed to be simple and
visual so that workers at all levels can use them easily and provide a means of communication that is
particularly well suited in group problem-solving efforts.
Flowcharts identify the sequence of activities or the flow of materials and information in a process.
Once a flowchart is constructed, it can be used to identify quality problems as well as areas for
productivity improvement.
Run charts show the performance and the variation of a process or some quality or productivity
indicator over time. Control chart limits make it easier to interpret patterns in a run chart and draw
conclusions about the state of control. Run and control charts summarize data in a graphical fashion
that is easy to understand and interpret, identify process changes and trends over time, and show the
effects of corrective actions.
Checksheets are special types of data collection forms in which the results may be interpreted on the
form directly without additional processing.
Histograms provide clues about the characteristics of the parent population from which a sample is
taken.
Pareto analysis separates the vital few from the trivial many and provides direction for selecting
projects for improvement.
The cause-and-effect diagram is a simple, graphical method for presenting a chain of causes and
effects and for sorting out causes and organizing relationships between variables.
Scatter diagrams are the graphical component of regression analysis. They often point to important
relationships between variables, and are used to verify possible causes and effects obtained from
cause-and-effect diagrams.
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9. Define root cause and describe root cause analysis.
ANS:
A root cause is a term use to designate the source of a problem. A useful approach to identify the root
cause is called the 5-Why Technique. This approach forces one to redefine a problem statement as a
chain of causes and effects to identify the source of the symptoms by asking why, ideally five times.
Example: A machine failed. Why(1)? Because a fuse blew. Why(2)? Because the bearing did not have
adequate lubrication and overheated. Why(3)? Because the lubrication pump was not working
properly. Why(4)? Because the pump axle was worn. Why(5)? Because sludge seeped into the pump
axle.
PTS:

10. Discuss Kaizen and how it differs from a Kaizen Blitz.

ANS:
Kaizen focuses on small, gradual and frequent improvements over the long term with minimum
financial investment and participation by everyone in the organization. In the Kaizen philosophy,
improvement in all areas of business - cost, meeting delivery schedules, employee safety and skill
development, supplier relations, new product development or productivity - serve to enhance the
quality of the firm. Thus, any activity directed toward improvement falls under the Kaizen umbrella.

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Kaizen Blitz is an intense and rapid improvement process in which a team or a department throws all
its resources into an improvement project over a short time period. Blitz teams are generally comprised
of employees from all areas involved in the process who understand it and can implement changes on
the spot. The big difference between Kaizen and a Kaizen Blitz is that a Kaizen Blitz is a short-term,
intensive project whereas Kaizen is continual.
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11. Define poka-yoke and provide some examples.
ANS:
Poka-yoke is an approach for mistake-proofing processes using automatic devices or methods to avoid
simple human error. Some examples are:
Fast-food restaurants used automated french-frying machines that can only be operated

one way and the french fries are prepackaged and the equipment automated to reduce the
chance of human error.
A device on a drill counts the number of holes drilled in a workpiece; a buzzer sounds if

the workpiece is removed before the correct number of holes has been drilled.
Computer programs display a warning message if a file that has not been saved is to be

closed.
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PROBLEM
1. Each day, a golf resort handles 700 golfers. Each guest encounters 22 "moments of truth" during a
typical day. The resort is open seven days a week. If they receive 12 complaints per week, what is the
epmo measure?
ANS:
The number of opportunities for error each week is (700)(22)(7) = 107,800.
So epmo = 12/107800 x 1,000,000 = 111.3
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2. Over the last year, 1,100 oral medications were administered at a health clinic. Quality is measured by
the proper amount of dosage and the use of the correct drug. In three (3) instances, the incorrect
amount was given, and in two (2) instances, the wrong drug was selected. What is the epmo metric?
ANS:
The number of opportunities for error is (1100)(2) = 2200.
Thus, epmo = 5/2200 x 1,000,000 = 2,272.7
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3. An airline performed 4000 preflight inspections during one month. Each inspection checks 50 items.
What is the maximum number of defects that could occur during a year if the process is operating at a
six sigma level?
ANS:
Number of opportunities for error = 4000(50) = 200,000. epmo = X/200000 x 1,000,000 = 3.4

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X = 0.68. Thus, during a year, at most 12(0.68) = 8.16 (around 8 or 9) defects would be found if the
process were at a six sigma level.
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4. The employees in an insurance companys mailroom are responsible for sorting and delivering the
incoming U.S. mail to the correct departments. These employees have been receiving numerous
complaints that mail is being delivering to the wrong departments. To better understand these
complaints, the mailroom employees recorded the number of these complaints they received each day
for the last 20 working days (Monday through Friday for the last 4 weeks). The data, in the order of
the last 20 working days, is given below.
Week 1

Monday
Tuesday
Wednesday
Thursday
Friday

13
5
14
11
9

Week 2
Monday
Tuesday
Wednesday
Thursday
Friday

12
6
12
11
15

Week 3
Monday
Tuesday
Wednesday
Thursday
Friday

12
5
12
9
10

Week 4
Monday
12
Tuesday
4
Wednesday
9
Thursday
15
Friday
9

Plot these data on a run chart. What conclusion can you make about the number of complaints
received over the last 4 weeks?

ANS:
The run chart is given below. It is evident that the number of complaints is fairly constant (stable)
over the 4 weeks. However, Tuesdays have a consistently low number of complaints relative to the
other days of the week.

16
15
14
13
12

Com pla ints

11
10
9
8
7
6
5
4
3

Day

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