RSM 100 - Chapter 12 - Summary Notes

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26 Sep 2011

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RSM 100Y – Chapter 12: Increasing Productivity and Quality
Productivity – Measure of Economic Performance
Quality - Product’s fitness for use
Quality Improvement Practices: Customers, Quality, Productivity, Profits
Measuring Productivity
Labour Productivity of a Country = GDP/# of Workers
Manufacturing versus Service Productivity
Service Sector suffers from the Baumol disease
- Service industry cannot be replaced by machines, thus productivity cannot
increase as rapidly as the manufacturing sector
Specific Industry Productivity
Certain sectors are more productive than others
- Agriculture in Canada is more productive than elsewhere
oMainly due to Technological advancements and SIZE
Company Productivity
High Productivity = Low Cost = More Profits or Lower Prices = More competitive
Managing Quality
Juran’s Quality Trilogy
- Quality Planning, Control and Improvement
Total Quality Management: NO DEFECTS ARE TOLERABLE!
Quality Ownership: Each employee responsible for creating/destroying quality
Value-Added Analysis: Evaluate all activities to determine benefits to customer
Competitive Product Analysis
Firm will reverse engineer products (study them) to see where they can improve
their own products
Statistical Process Control: Stats analysis that allows firm to see when
adjustments are needed to maintain high quality of produced shit
Process Variation: A certain range is acceptable, but too much is bad quality
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