Operations and Supply Chain Management The Core

340 OPERATIONS AND SUPPLY CHAIN MANAGEMENT
10. The following table lists all costs of quality incurred by Sam’s Surf Shop last year.
What was Sam’s appraisal cost for quality last year?
Annual inspection costs $ 155,000
Annual cost of scrap materials 286,000
Annual rework cost 34,679
Annual cost of quality training 456,000
Annual warranty cost 1,546,000
Annual testing cost 543,000
11. Below is a table of data collected over a six-month period in a local grocery store.
Construct a Pareto analysis of the data and determine the percentage of total
complaints represented by the two most common categories.
All Other 71
Checker 59
General 58
Service Level 55
Policy/Procedures 40
Price Marking 45
Product Quality 87
Product Request 105
Checkout Queue 33
Stock Condition 170
12. A common problem that many drivers encounter is a car that will not start. Create
a fishbone diagram to assist in the diagnosis of the potential causes of this problem.
13. A manufacturing company has been inspecting units of output from a process.
Each product inspected is evaluated on five criteria. If the unit does not meet
standards for the criteria, it counts as a defect for the unit. Each unit could have
as few as zero defects, and as many as five. After inspecting 2,000 units, they
discovered 33 defects. What is the DPMO measure for this process?
14. What is the term for a flowchart that is used to separate value-added from nonvalue-added
steps in a process?
15. What does the acronym DMAIC stand for?
16. A customer call center is evaluating customer satisfaction surveys to identify the
most prevalent quality problems in their process. Specific customer complaints
have been analyzed and grouped into eight different categories. Every instance
of a complaint adds to the count in its category. Which Six Sigma analytical tool
would be most helpful to management here?
LO10–4 17. A company currently using an inspection process in its material receiving
department is trying to install an overall cost reduction program. One possible
reduction is the elimination of one inspection position. This position tests material
that has a defective content on the average of 0.04. By inspecting all items, the
inspector is able to remove all defects. The inspector can inspect 50 units per hour.
The hourly rate including fringe benefits for this position is $9. If the inspection
position is eliminated, defects will go into product assembly and will have to be
replaced later at a cost of $10 each when they are detected in final product testing.
a. Should this inspection position be eliminated?
b. What is the cost to inspect each unit?
c. Is there benefit (or loss) from the current inspection process? How much?
18. A metal fabricator produces connecting rods with an outer diameter that has a 1
± .01 inch specification. A machine operator takes several sample measurements
over time and determines the sample mean outer diameter to be 1.002 inches with
a standard deviation of 0.003 inch.
a. Calculate the process capability index for this example.
b. What does this figure tell you about the process?