Enhancing Quality: Cost Analysis and Improvement Strategies
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5. How Should Quality Measures and Financial Metrics Align? Financial metrics assess the costs and benefits of inspection versus failure prevention. Non-financial measures identify areas for improvement and indicate long-term performance.
6. Understanding Customer Response Time, Costs, and Delays Customer response time is the duration between order receipt and delivery. Delays stem from: a) uncertainty regarding customer needs, and b) operational bottlenecks. Delay costs include reduced income and increased inventory expenses.
4. Identifying Relevant Costs and Benefits of Capital Improvements Relevant costs are the incremental operational costs of the quality program. Relevant benefits include cost savings and increased contribution margin from improved quality.
1. What Are the Four Categories of Quality Program Costs? The four categories are: prevention costs, inspection costs, internal failure costs, and external failure costs.
2. Non-Financial Customer Satisfaction Metrics for Management Dashboards Managers can use metrics like the number of customer complaints and the percentage of defective units shipped to gauge customer satisfaction.
3. Methods for Identifying Major Quality Problems Three methods include: a) control charts for distinguishing random and non-random variations, b) Pareto charts for identifying frequent issues, and c) cause-and-effect diagrams for identifying potential faults.