Operations and Supply Chain Management The Core

332 OPERATIONS AND SUPPLY CHAIN MANAGEMENT
exhibit 10.17 Operating Characteristic Curve for AQL = 0.02, α = 0.05, LTPD = 0.08, β = 0.10
1.0
α = 0.05 (producer’s risk)
0.90
0.80
0.70
Probability of
acceptance
0.60
0.50
0.40
n = 99
c = 4
∙ = Points specified by sampling plan
0.30
0.20
0.10
β = 0.10 (consumer's risk)
0 1 2 3 4 5 6 7 8 9 10 11 12 13
AQL
LTPD
Percentage defective
CONCEPT CONNECTIONS
LO10–1 Explain the scope of total quality management in a firm.
∙ Total quality management is a comprehensive approach to quality with a focus on what is
important to the customer.
∙ There are two aspects of quality to consider: (1) the careful design of the product or service
and (2) assurance that the firm’s processes can consistently produce or deliver the design.
∙ Specific features of the design relate to what the intended market for the products expects
and its inherent value.
∙ Processes are designed so that specific design specifications such as size, surface, finish, or
delivery speed are consistently met when the product is produced or service delivered.
∙ Costs related to quality include the expenses related to inspection, rework, and repair or warranty.
Total quality management (TQM) Managing the entire organization so that it excels on all
dimensions of products and services that are important to the customer.
Malcolm Baldrige National Quality Award An award established by the U.S. Department of
Commerce given annually to companies that excel in quality.
Design quality The inherent value of the product in the marketplace.
Conformance quality The degree to which the product or service design specifications are met.
Quality at the source Making the person who does the work responsible for ensuring that
specifications are met.
Dimensions of quality Criteria by which quality is measured.