Description
- Complete five problems in which you analyze common approaches to determining product or service quantities based on financials, contribution to profit based on a specific price and volume, product reliability, and quality control.This assessment explores the quality tools companies use to monitor, control, and analyze their products or services. Most businesses in today's economy must invest in quality to survive. Experts on quality have consistently shown that investing in programs and processes to ensure high quality does pay off.SHOW LESSBy successfully completing this assessment, you will demonstrate your proficiency in the following course competencies and assessment criteria:
- Competency 2: Apply the tools and technology used in operations management.
- Apply operations management tools associated with determining a breakeven analysis.
- Apply operations management tools associated with determining contribution to profit.
- Apply operations management tools associated with determining reliability based on a product with subcomponents used in series.
- Apply operations management tools associated with determining reliability based on a product with subcomponents used in parallel and in series.
- Apply operations management tools associated with determining control limits.
Competency Map
CHECK YOUR PROGRESSUse this online tool to track your performance and progress through your course. - Competency 2: Apply the tools and technology used in operations management.
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Context
Today's customers want high quality products at the lowest possible price. Businesses establish quality expectations and conform to those expectations based on the customer or market segment they are going after. Today's consumers also demand organizations to be concerned with sustainable resources; this is evident with the passage of recent regulations and laws.SHOW LESSWhat Is Quality?
It is important to understand that quality is not just an issue for companies that provide products. Services are measured by quality expectations as well, and are monitored to ensure high levels of quality. Organizations that provide services are extremely vulnerable to high quality expectations, because they are usually face-to-face with the customer on a regular basis. Service is not as easy to quantitatively measure, but it is still important to measure the service quality through the use of surveys, questionnaires, and other tools.In service, the idea is to make sure that customer's expectations have been exceeded, thus establishing the client as a return customer. Businesses have started to recognize the important role their employees play in this process, and have invested heavily in education, training, and team development. The best practice of investing in employees helps a company survive in today's competitive economy.A company determines its level of quality based, in part, on the specific expectations an individual is willing to pay. Once this and other factors are considered, a company sets its quality standards. The transformation of inputs to outputs creates many variables—from materials used to shipping and handling of the final product—that can affect quality. More importantly, industry metrics need to be considered to better manage effective resource use and determine organizational performance for sustainability.Total Quality Management
Total Quality Management (TQM) is a process by which companies strive for zero defects while delivering high quality products. By understanding the process, a company can identify the causes of defects and work towards eliminating them. Companies monitor and improve the development of a product or service with the use of statistical process control (SPC), control charts, process capabilities, Six Sigma, and other tools. Six Sigma is a tool that involves the whole company, especially top management, with the intent of reducing defective workmanship to 3.4 parts per million transactions. This is not a quick-fix program, but a long-term, corporate culture mindset that strives to eliminate defects completely so they do not return again. - Toggle Drawer
Questions to Consider
To deepen your understanding, you are encouraged to consider the questions below and discuss them with a fellow learner, a work associate, an interested friend, or a member of the business community.- How would you describe product or service design, and its processes?
- How do the quality tools selected by a company impact the company's performance?
- Does the company you work for incorporate Six Sigma?
- How can incorporating Six Sigma improve a company's performance?
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Resources
Suggested Resources
The following optional resources are provided to support you in completing the assessment or to provide a helpful context. For additional resources, refer to the Research Resources and Supplemental Resources in the left navigation menu of your courseroom.Library Resources
The following e-books or articles from the Capella University Library are linked directly in this course:- Naidu, N. V. R., Babu, K. M., & Rajendra, G. (2006). Total quality management. Delhi, IN: New Age International.
- Shridhara Bhat, K. (2010). Total quality management: Texts and cases. Mumbai, IN: Global Media.
- Kemp, S. (2005). Quality management demystified. Blacklick, OH: McGraw-Hill.
Course Library Guide
A Capella University library guide has been created specifically for your use in this course. You are encouraged to refer to the resources in the BUS-FP4014 Operations Management for Competitive Advantage Library Guide to help direct your research.Internet Resources
Access the following resources by clicking the links provided. Please note that URLs change frequently. Permissions for the following links have been either granted or deemed appropriate for educational use at the time of course publication.- General Electric Company. (2014). What is six sigma? Retrieved from http://www.ge.com/en/company/companyinfo/quality/w...
- American Society for Quality. (n.d.). Six sigma forum. Retrieved from http://asq.org/sixsigma/
- ISSSP. (2014). International Society of Six Sigma Professionals. Retrieved from http://isssp.com/
- iSixSigma. (2014). Retrieved from http://www.isixsigma.com/
- Six sigma systems. (2014). Retrieved from http://www.sixsigmasystems.com/index.php
- APICS. (2013). Retrieved from apics.org
Bookstore Resources
The resources listed below are relevant to the topics and assessments in this course and are not required. Unless noted otherwise, these materials are available for purchase from the Capella University Bookstore. When searching the bookstore, be sure to look for the Course ID with the specific –FP(FlexPath) course designation.- Reid, R. D., & Sanders, N. R. (2016). Operations management: An integrated approach (6th ed.). Hoboken, NJ: Wiley.
- Chapter 5, "Total Quality Management."
- Chapter 6, "Statistical Quality Control."
Assessment Instructions
Scenario
Suppose that you were recently hired as the operations manager for ABC Manufacturing, a small manufacturing company founded two years ago. The company has been reasonably successful since it was founded, but has recently been experiencing several production issues. You were hired to recommend and implement improvements to get the company back on track.Problems
Complete the following problems based on the ABC Manufacturing scenario above. For each question, briefly describe the operations management issue and describe how you would approach an analysis, then provide answers to the algebraic equations.Question 1. ABC Manufacturing is unsure of the ideal price to quote for one of their products, a pump. ABC's president has asked you to do a break even analysis for the pump, and to recommend the optimal price. The fixed costs (FC) associated with manufacturing this particular product are $100,000, and the variable costs (VC) are $50 per unit. ABC's president is considering a selling price (P) for this product of $100. The president wants to know how many units have to be sold in order to break even (BEU).- Analyze this operations management issue.
- Provide the algebraic equation (using BEU, FC, P, and VC as variables) for the breakeven analysis.
- Calculate and provide the numeric breakeven value.
- Analyze this operations management issue.
- Provide the algebraic equation (using CP, UV, P, and VC as variables) for this analysis.
- Calculate and provide the numeric contribution to profit (in dollars) for each of the two price points.
- Analyze this operations management issue.
- Provide the algebraic equation (using RP, R1, R2, R3, R4, and R5 as variables) for this analysis.
- Calculate and provide the overall product reliability, given those subassemblies utilized in series.
- Analyze this operations management issue.
- Provide the algebraic equation (using RP, SC1R, SC2R, SC3R, and SC4R as variables) for this analysis.
- Calculate and provide the overall product reliability given those subassemblies.
Sample Measurements Table Time Volume of Liquid in Bottles of Lubricant (in Ounces) 8:00am 30.03 9:00am 30.04 10:00am 29.98 11:00am 30.01 12:00pm 30.00 1:00pm 29.97 2:00pm 30.08 3:00pm 29.98 4:00pm 29.99 5:00pm 29.98 Mean (M) 30.006 - Analyze this operations management issue.
- Provide the algebraic equation for the UCL and for the LCL (using UCL, LCL, M, and SD as variables).
- Calculate and provide the numerical ULC and LCL values.
Additional Requirements
- Written communication: Written communication should be free of errors that detract from the overall message.
- APA formatting: Any references and citations should be formatted according to APA (6th edition) style and formatting.
- Font and font size: Times New Roman, 12-point.
Explanation & Answer
Attached. Please let me know if you have any questions or need revisions.
Manufacturing Decisions
Name
Affiliation
Course
Instructor
Date
Manufacturing Decisions
Question 1
𝐵𝐸𝑈 = 𝐹𝐶/(𝑃 − 𝑉𝐶)
Where FC - Fixed costs
P- Selling price
VC- Variable cost per unit
Given :
FC = $100000
P = $100
VC= $50
=100000/(100-50)
=2000 units
...