Assignment Five – Quality Cost and Lean Six Sigma Tools

Assignment Five reviews on the course materials of Units 4 and 5. Student will answer all questions in MS Word and or Excel Spreadsheet , submit your document into the link in Assignment area/Assignment Five, see due date from the Course Schedule.

Question One : Quality Cost Calculation

ABC children’s toy manufacturing company implemented the Lean Six Sigma program in 2004. Following are quality-related accounting data that have been accumulated for the 5-year period 1 year prior to the program’s start.

Year

2004

2005

2006

2007

2008

Quality Costs (000s)

Prevention

$ 3.2

10.7

28.3

42.6

50.0

Appraisal

26.3

29.2

30.6

24.1

19.6

Internal Failure

39.1

51.3

48.4

35.9

32.1

External Failure

118.6

110.5

105.2

91.3

65.2

Accounting Measures (000s)

Sales

$ 2,700.6

2,690.1

2,705.3

2,810.2

2,880.7

Manufacturing costs

420.9

423.4

424.7

436.1

435.5

a. Compute the company’s total failure costs as a percentage of total quality costs for each of the 5 years. Does there appear to be a trend to this result? If so, speculate on what might have caused the trend.

b. Compute prevention costs and appraisal costs, each as a percentage of total costs, during each of the 5 years speculate on what the company’s quality strategy appears to be.

c. Compute quality –sales indices and quality-cost indices for each of the 5 years. Is it possible to assess the effectiveness of the company’s quality-management program from these index values?

d. List several examples of each quality-related cost-that is, prevention, appraisal, and internal and external failure – that might result from the production of children toys.

Note: to learn more on quality cost categories and index calculation, visit the website http://www.authorstream.com/Presentation/Hassanasif-493959-cost-of-quality/

This PPT file, slides # 17-18 show quality cost index calculation.

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Question Two : Pareto Chart

During the past month, a customer-satisfaction survey was given to 200 customers at a local fast-food restaurant. The following complaints were lodged:

Complaint

Number of Complaints

Cold Food

105

Flimsy utensils

20

Food tastes bad

10

Salad not fresh

94

Poor service

15

Food greasy

9

Lack of courtesy

5

Lack of cleanliness

25

Create a Pareto chart with this information, comment on what you (as a manager of this fast-food restaurant) would do about the high number of complaints on ‘cold food’ and ‘salad not fresh’. See explanation of Pareto Chart from your textbook, page 318-320.

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Question Three: Problem solving using define, measure, analyze, improve, control An orange juice producer has found that the fill weights (weight of product per container) of several of its orange juice products do not meet specifications. If the problem continues, unhappy customers will stop buying its product. Outline the steps that it should take to solve this problem. Provide as much detail as you can

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Question Four : Creativity and Innovation tools

Brainstorm 10 reasons why a computer might malfunction.

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For questions 5-6 , you can solve only 1 subject, either question Five or Six. Selecting the topic that you’re interested to learn in details between Q5 – Statistical Control Chart or Q6 – Design of Experiment.

Question Four – Statistical Process Control

Sample of six ball bearings are taken periodically, and their diameters (in mm) are measured. The following table presents the means, ranges, and standard deviations for 25 consecutive samples.

Sample

X-bar

R

s

1

199.5

7.2

2.38

2

200.4

7.9

2.7

3

202.0

3.6

1.35

4

198.9

5.3

1.95

5

199.1

3.4

1.53

6

200.2

4.8

2.19

7

199.5

2.1

0.87

8

198.1

5.5

2.22

9

200.0

5.5

2.09

10

199.0

9.2

3.17

11

199.3

7.8

2.64

12

199.3

5.8

1.98

13

200.5

3.6

1.36

14

200.1

5.7

2.34

15

200.1

3.0

1.11

16

200.4

5.2

1.99

17

200.9

4.1

1.54

18

200.8

5.5

2.01

19

199.3

8.3

2.92

20

199.8

3.8

1.78

21

199.5

3.6

1.6

22

198.9

7.2

2.6

23

199.6

3.8

1.69

24

200.3

3.1

1.15

25

199.9

4.1

1.86

The means are = 199.816, = 5.164, and = 1.961

a. Calculate the 3? control limits for the R chart, is the variance under control? If not, delete the samples that are out of control and recomputed and .

b. Based on the sample range R, calculate the 3? control limits for the chart. Based on the 3? limits, is the process mean in control? If not, when is it first detected to be out of control?

c. Based on the Western Electric rules, is the process mean in control? If not, when is it first detected to be out of control?

Using a textbook from Mmgt 4580 Quality Systems to help you find the values of factors for computing Central Lines and Control limits. Also, the handout of Statistical Quality Control was posted in the Unit 5/Supplement/SQC, a summary from Navidi’s textbook.

Question Five – Design of Experiment.

A spectrometer was used to make five measurements of the carbon content (in ppb) of a certain silicon wafer on four consecutive days. The results are as follows:

Day 1: 358 390 380 372 366

Day 2: 373 376 413 367 368

Day 3: 336 360 370 368 352

Day 4: 368 359 351 349 343

a. Construct an ANOVA table, you can give a range for the P-value.

b. Can you conclude that the calibration of the spectrometer differs among the four days?

The handout of Design of Experiement was posted in the Unit 5/Supplement/DOE; this may help to calculate. Or you can use Excel spreadsheet, or SPSS, or Minitab to compute the ANOVA table.

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X

X

s

R

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