RMG 301 Lecture Notes - Lecture 9: Brainstorming, Total Quality Management, Statistical Process Control
8 Nov 2017
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Why is quality important: customer loyalty, customer satisfaction, adds value, strengthens brand image, repeat business, referrals, there is a cost to not having quality. Remember: stores do not have a low $ per sq. foot, it is not reasonable. For example, a store wouldn"t have 33$ per sq. ft. Example question: sales per square foot of store 2 is 7% more than store 1 sales per square foot of 400$, therefore store 2 sales per square foot is . 7%x400=28. Where is quality controlled: all along the supply chain, the earlier the better costs of repair or recovery are less, by putting the investment early, we can save costs later. Recalls by bmw for example: $ = prevention costs, 3721 = internal failure costs, 3721$ = external failure costs. Cost of quality management: prevention costs keep nonconforming goods and services from being made and reaching the customer (internal, appraisal costs the cost to check the quality to detect/correct problems (internal)
