SGMT 3000 Lecture Notes - Lecture 5: Six Sigma, Information System, Total Quality Management
9 May 2016
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Document Summary
Aimed at improving the effectiveness of a company"s operations and its ability to attain superior: efficiency, quality, innovation, customer responsiveness. Efficiency - measured by the quantity of inputs that it takes to produce a given output. Economies of scale: reductions in unit costs attributed to a larger output: ability to spread fixed costs over a large production volume and produce in large volumes. To achieve greater division of labor and specialization. Unit costs falls as your produce more of the same product, until you reach a certain pt. Unit cost rises after a while (diseconomies of scale) Diseconomies of scale: unit cost increases associated with a large scale of output. Cost savings that come from learning by doing. Gradually figure out more efficient ways to do a task. More significant when a technologically complex task is repeated, as there is more to learn. Diminish in importance after a period of time. Triggered by changes in a company"s production system.
