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Lecture 20

ECON 2500 Lecture 20: Chapter 17 Statistics for quantity Control and Capability

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ECON 2500
Andrei Semenov

Chapter 17 Statistics for quantity: Control and Capability Lecture 20 • Quality is a broad concept. Often it refers to a degree or grade of excellence. For example, you may feel that a restaurant serving filet mignon is a higher-quality establishment than a fast-food outlet that serves hamburgers. • You may also consider a name-brand sweater of higher quality than one sold at a discount store. In this chapter, we consider a narrower concept of quality: consistently meeting standards appropriate for a specific product or service. • The fast-food outlet, for example, may serve high-quality hamburgers. • The hamburgers are freshly grilled, are served at the right temperature, and are the same every time you visit. The discount store sweaters may be high quality because they are consistently free of defects and the tight knit helps them keep their shape wash after wash. Statistically minded management can assess quality through sampling. • For example, the fast-food outlet could sample hamburgers and measure the time from order to being served, the temperature of the burgers, and their tenderness. • This chapter discusses the methods used to monitor the quality of a product or service and effectively detect changes in the process that may affect its quality. Membership renewal process • Use of data to assess quality Organizations are (or ought to be) concerned about the quality of the products and services they offer. • What they don’t know about quality can hurt them: rather than make complaints that an alert organization could use as warnings, customers often simply leave when they feel they are receiving poor quality. • A key to maintaining and improving quality is systematic use of data in place of intuition or anecdotes. Here are two examples. • Sometimes data that are routinely produced make a quality problem obvious. • The internal financial statements of a professional society showed that hiring temporary employees to enter membership data was causing expenditures above budgeted levels each year during the several months when member
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