2 Quality Management

Answers to Questions

2-1. Consumers perceive quality to be how well a product meets its intended use—that is, how well it
does what it is supposed to do—whereas from the product’s perspective, quality is how well the
product conforms to its design during the production process.

2-2. 1. Performance: operating characteristics of a product

2. Features: extra items added to basic characteristics
3. Reliability: probability that a product will operate properly
4. Conformance: the degree to which a product meets standards
5. Durability: how long the product lasts
6. Serviceability: ease and speed of repair and courtesy of repair person
7. Aesthetics: how a product looks, feels, sounds, smells, or tastes
8. Safety: Assurance that the customer will not suffer harm; especially important for autos.
9. Other: subjective perceptions based on brand name or advertising

2-3. Quality of design is the degree to which quality characteristics are designed into a product,
whereas quality of conformance is how effectively the production process is able to conform to the
specifications required by design.

2-4. The cost of quality assurance is the cost of maintaining an effective quality program and includes
prevention and appraisal costs. The cost of nonconformance, or poor quality, is the result of
internal and external failures. These two costs react oppositely to each other; as the cost of quality
assurance increases, the cost of poor quality decreases.

2-5. Internal failure costs are incurred when poor quality is discovered before the product is delivered
to the customer, whereas external failure costs are incurred after a customer receives a poor-quality
product. Internal failure costs include scrap, rework, process failure, and downtime, whereas
external failure costs include customer complaints, product returns, warranty claims, product
liability, and lost sales.

2-6. The contractor could be experiencing low productivity yields and have extensive internal failure
costs, including scrap, rework, process failure, and downtime costs.

2-7. a. From the consumer’s (e.g., student or parent) perspective, quality is probably determined by
whether the college education provides the job opportunity expected and whether the graduate
perceives he or she has acquired an anticipated level of knowledge that will enable the
graduate to perform the job effectively. From the producer’s (e.g., university) perspective,
quality is how effectively it is able to deliver knowledge (i.e., required courses) and provide
the quality of life experience expected by the student.
b. The education achieved by the student provides the job opportunities expected and a level of
knowledge that enables the graduate effectively to perform the job achieved.
c. Quality-assurance costs include the cost of hiring the best faculty, administrators, and support
personnel, the cost of designing and redesigning courses and curriculum to meet changing
needs, the cost of providing a good physical and mental environment (i.e., housing, food,
 entertainment, security, etc.), the cost of modern technical teaching equipment, the cost of
information systems, and the cost of assessing alumni satisfaction with their education. Costs
of poor quality include students who fail or drop out, reduced funding from the state or private
donors, and fewer enrollments.
d. Quality circles could be developed within administrative and operational units and academic
departments. Circles might include both faculty or administrators and classified employees.
The normal quality circle stages of training, problem identification, analysis, solution, and
presentation could be followed.

2-8. Improving quality will increase product yield—that is, the number of acceptable units—thus
increasing productivity.

2-9. The cost of poor quality could include external failure costs for customer complaints, returned
DVD players to be repaired under warranty, lost future sales, and liability costs if someone is hurt
because of the problem. Costs of quality improvement might include improved design costs for the
DVD player, process costs, and inspection costs for the final product and at various stages of the
production process.

2-10. DVD player: Visual attractiveness, size, weight, clarity of sound and picture, and features for
rewind and fast-forward, program search, programming, playback, etc.
Pizza: Size, ingredients, taste, smell, service in delivery, temperature.
Running shoes: Size, weight, comfort, visual attractiveness, durability.

2-11. The input is customer inquiries and the final product is responses that result in customer
satisfaction. Associated quality costs might include prevention costs, such as designing a
telephone system to ensure prompt connections without waiting and a properly designed computer
system to provide accurate customer account information, and training costs to make certain
service operators are courteous and knowledgeable. Appraisal costs might include the cost of
monitoring service calls to ascertain response rates and operator courtesy. Poor quality might
result in complaints from customers and lost accounts.
A quality management program could incorporate a system to monitor calls to ensure prompt,
courteous, and knowledgeable service. An employee-involvement program, wherein operators
might identify problems, would be beneficial.

2-12. Prevention costs are directed at preventing poor quality products from reaching the customer, thus
avoiding the various internal and external failure costs associated with poor quality.

2-13. It is important to have a means for assessing the impact of quality improvement programs on the
organization’s profitability and productivity.

2-14. W.E. Deming: Introduced the Japanese to quality management principles and philosophy,
embodied in his 14 points.
Joseph Juran: A major contributor to the Japanese quality movement.
Phillip Crosby: Changed general perceptions of cost of quality and promoted zero defects.
Armand Feigenbaum: Introduced the concept of total quality control, a total company-wide
approach to quality management.
Kaoru Ishikawa: Introduced quality circles and cause and effect diagrams.
Genichi Taguchi: Developed the Taguchi method for product and process design.
2-15. The Baldrige Award has had a pervasive impact on American companies, in general promoting
quality improvement. Thousands of companies request award applications each year to use simply
to establish quality management programs based on Baldrige Award criteria.

2-16. This should be a student project. The journal can be found in most libraries, and the articles are
generally easy to read.

2-17. The student could provide many reasons for failure including lack of total commitment, ineffective
planning, goals too easy or too difficult to achieve, improper measurement techniques, ineffective
leadership, not enough employee training, etc. See G. Salegra and Farzaneh, “Obstacles to
Implementing Quality,” Quality Progress, 33, no. 7 (July 2000): 53–57.

2-18. The dimensions of quality for a service company are located in the text. The student should
identify these or similar ones for the company they select.

2-19. The two service companies should be in the community and the quality characteristics the students
will tend to focus on will include courtesy and quickness of service.

2-20. Although students in this class might suggest that grades are a quality measurement a more
realistic approach to evaluation are student evaluations of the class or surveys of students. Quality
characteristics might include course organization, presentation of lectures, class environment,
physical appearance of the classroom, schedule (i.e., are the lectures completed on time), the
quality of supplementary material, physical appearance and demeanor of the instructor, including
friendliness and courtesy, the accuracy and completeness of assignments, etc.

2-21. The answer depends on the company selected by the student. For example, there is a particular
hotel that has never gotten a room reservation right for us, and, the instructions for ordering tickets
at the web site for the 1996 Olympics in Atlanta were littered with pitfalls. Airlines are a favorite
example of a poor quality service for students who travel.

2-22. A similar question to 26. Restaurants, retail stores and grocery stores are examples of local
businesses that, in our experience, tend to vary in quality. We have never had a bad ordering
experience with L.L. Bean although that’s not true of some other mail order operations we have
dealt with. In most cases, if a service has been identified by the student it will be because of
courteous, helpful employees, while if a manufacturing product has been identified, it will be
because of superior physical traits, such as durability.

2-23. TQM tends to give some focus and structure to strategic planning. TQM provides identifiable
goals, and many well-documented initiatives for quality improvement such as quality circles,
employee training, empowerment, etc. TQM also provides a means for measuring success which is
essential in a strategic planning process.

2-24. Many U.S. suppliers cannot do business with companies overseas unless they have ISO
certification. In addition, many U.S. companies also desire or request their suppliers to comply
with ISO 9000 standards.

2-25. Common characteristics that the students will discover include strong leadership at the top, total
company commitment, employee training, involvement and empowerment, challenging goals for
quality achievement, focus on customer satisfaction, and extensive use of statistical quality control
techniques, among other things.
2-26. Some companies believe their quality is “good enough.” However, primary reasons for not
implementing a TQM program are lack of time and the cost involved; some companies do not
have the resources available to undertake a TQM program.
2-27. This will depend on the web site the student accesses. In general, they should adapt the attributes
described for services.
2-28. This depends on the airline the student selects. Example defects they might mention are flight
delays or cancellations, lost luggage or luggage mishandling, discourteous employees, wrong or
misleading flight information, uncomfortable seats, etc.
2-29. This will depend on which websites the student selects.
2-30. Categories of possible quality problems might be related to the ordering process, pizza
construction, pizza ingredients, packaging/boxing, time to receive order, order
accuracy/correctness, and pricing.
2-31. If someone purchases a residence then the dwelling is more of a product. However, renting a
dormitory room or an apartment tends to fall into the service category because it is part of an
ongoing process or interaction between the owner and renter. In other words, the owner retains
responsibility for the product, i.e., the dwelling. As such, the quality of the living accommodation
should be assessed according to the dimensions of quality for a service.
2-32. Categories of quality problems for flight delays could relate to employees (not enough to check in,
problems with the check-in process, deplaning problems, insufficient maintenance personnel to
accomplish plane turn-around, etc.), mechanical problems, luggage problems, maintenance
problems, weather, flight controller problems, over booking, over scheduling, etc.
2-33. This depends on the business the student selects. If for example, they selected a restaurant they eat
at frequently they would need to identify the categories of quality problems which might include
employees, food quality, restaurant environment, waiting time, price, service, menu, etc.
2-34. It should be obvious to the student that the most important defects are the engine problems and
faulty brakes. The priority of the quality problems is almost the reverse of the frequencies; faulty
brakes are clearly the most significant category of defects. This points out that when applying
Pareto analysis the degree of importance must be the same for all defect categories. If not then the
categories should be weighted according to their importance in order to adjust the chart.
2-35. Marketing has direct contact with the customer. Marketing is typically responsible for the
consumer research that determines the quality characteristics that customers want and need, and
the price they are willing to pay for it. Marketing also informs the consumer about the quality
characteristics of a product through advertising and promotion. Sales provides feedback
information through its interaction with the customer, which is a determinant of product design.
Research and development will explore new ideas for products and be actively involved in product
innovation.
Engineering translates the product quality characteristics determined by marketing and top
management into a product design, including technical specifications, material and parts
requirements, equipment requirements, workplace and job design, and operator training and skills.
Overdesigning the product is a drain on the company’s resources and can erode profits, whereas
underdesigned products will generally not meet the customer’s quality expectations. Genichi
Taguchi, the Japanese quality expert, estimates that poor product design is the cause of as much as
80 percent of all defective items. It is much cheaper and easier to make changes at the design stage
than at the production stage, so companies need to focus on quality at all stages of the design
 process.
Purchasing must make sure that the parts and materials required by the product design are of
high quality. Quality of the final product will be only as good as the quality of the materials used
to make it. Purchasing must select vendors who share the company’s commitment to quality and
who maintain their own quality management program for providing high-quality service,
materials, and parts.
Human resources is responsible for hiring employees that have the required abilities and skills,
and training them for specific job tasks. Employees not well trained in their tasks will probably
contribute to poor quality or service. Personnel also have responsibility for educating employees
about quality and ways to achieve quality in their tasks. TQM requires that all employees
throughout the organization be responsible for quality. Employees, collectively and individually,
must not only perform their tasks according to design specifications but also be responsible for
identifying poor quality or problems that may lead to poor quality and taking action to correct
these problems. Performance appraisal under TQM focuses more on quality improvement and
group and company achievement than on individual job performance.
Management at all levels must implement the product design according to quality
specifications, controlling labor, materials, equipment, and processes. Failure to manage
effectively can result in employee errors, equipment breakdown, bottlenecks, interrupted service,
and the like, which contribute to poor quality.
Distribution makes sure that high-quality products are delivered on-time and undamaged to the
customer. Packaging methods and materials, storage facilities and procedures, and shipping modes
must ensure that final products are protected and that customers receive them on time.
2-36. This answer depends on the award the student selects.
2-37. This answer depends on the company the student selects.
2-38. This answer depends on the article and company the student selects.
2-39. This question was adapted from: L. Fredendall, J. Patterson, C. Lenhartz and B. Mitchell,” What
Should Be Changed?”, Quality Progress 35 (1; January 2002): p. 50–59. This is an excellent
article about the use of cause and effect diagrams students can be referred to.
2-40. Black Belt—the leader of a quality improvement project, which is a full-time position
Green Belt—a project team member, which is a part-time position
Master Black Belt—a teacher and mentor for Black Belts which, is also a full-time position. A
Black Belt would have to have led several successful projects before being certified as a Master
Black belt.
2-41. Breakthrough Strategy:
1. Define the process including who the customers are and what their problems are.
2. Measure the process and collect data.
3. Analyze the data in order to develop information that provides insight into the process,
including causes of defects.
4. Improve the process by making changes and measuring the results.
5. Control the improved process by monitoring it and making sure the desired performance level
is sustained.
2-42. This answer depends on the project the student selects.
2-43. In general, the ACSI model is a set of causal equations that link customer expectations, perceived
quality, and perceived value to customer satisfaction (ACSI). In turn, satisfaction is linked to
consequences as defined by customer complaints and customer loyalty—measured by price
tolerance and customer retention. There are two menu items on the ACSI website that describe, in
general terms, how the ACSI is determined—“What it measures,” and “Methodology.” The
student should refer to these descriptions. As an example, the student could select two fast food
 restaurant chains in the fast food industry and compare the company with the highest score with
the lowest scoring company and explain the reasons for the difference in scores.

2-44. Answer depends on the personal health improvement project the student selects.

2-45. Answer depends on the personal improvement project the student selects.

2-46. Answer depends on the infirmary process the student selects.

2-47. Answer depends on the registration process at the student’s university.

2-48. In general, the Japanese recognized that even though high quality might cost more in the “short
run,” in the long run it would help them gain market share, which would increase long term
profits. This is something American companies did not recognize. The Japanese economic
climate and business and management culture was also more conducive to quality management
programs than American companies.

2-49. The student should go to the ISO website at [Link] to determine these steps.

2-50. Answer depends on the store the student selects.

2-51. The student should refer to the ISO website at [Link] and the Baldrige Award website at
[Link] to answer this question.

2-52. The answer should include references to some form of customer feedback, such as a “voice of the
customer (VOC)” process and surveys. Since assessing customer satisfaction is a critical part of
the Baldrige Award criteria, the summaries of Baldrige Award winning companies at
[Link] are a good source for students to learn how companies and organizations assess
customer satisfaction.

2-53. In general, this will be a subjective answer on the part of the student. A good source for this
question is an article by David Goldhill titled “How American Health Care Killed My Father,”
that appeared in the September 2009 online edition of The Atlantic magazine
([Link]).
Solutions to Problems

2-1. a. Failure costs as percentage of quality costs:

2006

2007

2008

2009

2010
The failure costs decrease as a percentage of total quality costs. This may be attributed to an
increase in product monitoring and inspection. Fewer defective products are reaching the
consumer, as evidenced by the sharp decline in external failure costs.

b.
Prevention costs as % of quality Appraisal costs as % of quality costs
costs:
2006

2007

2008

2009

2010

The increase in prevention costs as a percentage of total quality costs indicates that Backwoods
American is placing more emphasis on prevention of defects rather than correction of them.
Perhaps they are spending more in the areas of quality planning, product design, process,
training, and information. This is contributing to a decline in the need for inspection and
testing, equipment testing, and operators to test quality; thus appraisal costs decline, both
absolutely and as a percentage of total costs. Prevention also contributes to the decline in
external and internal failures, because fewer defective products are produced to begin with.
Increases in prevention expenditures will result in a decrease in all other quality costs.

c.
Quality Sales Quality-Cost
Index Index
2006 6.93 44.48
2007 7.50 47.64
2008 7.85 50.04
2009 6.90 44.46
 2010 5.79 38.32
These index values do not provide much information regarding the effectiveness of the quality
assurance program. They are, however, useful in making comparisons from one period to the
next and in showing trends in product quality over time.

d. Examples of quality-related costs:

• Prevention: Market research, that is, producing what consumers want; purchasing only high-
quality down and other materials, designing an efficient and effective manufacturing process;
training employees in making quality products.
• Appraisal: Inspection of raw materials, work-in-process, and finished product; equipment
testing (pattern cutter, sewing machines, etc.), inspection.
• Internal failure: Wasted materials and labor, defective products discovered during inspection,
use of inefficient processes, equipment downtime, poorly trained employees.
• External failure: Defective products, customer complaints, warranty costs, lost sales, loss of
good will.

2-2. a. Product yield

b. Manufacturing cost per good parka:

Improving the quality assurance program has resulted in fewer defective parkas, lower rework
costs, and greater productivity. This has lowered the per-unit manufacturing costs without
additional capital investment.
2-3. a.

b.

2-4.

Note: if don’t round until the end, $29.85 instead of $30

2-5. Manufacturing cost per good product:

2008 = 26,720

In this case, total direct manufacturing

and total direct rework

2009 = 30,188.50

2010 =32,837.50

Percentage change:
2008 - 2009: -7.60%
2009 - 2010: -4.10%

2-6. a.

b. For a yield of 300, input would have to be

2-7. a.
Greatest yield

b. Alternative 2 will result in the highest yield and will be the most effective.

2-8.

2-9. a.

b.

c.

d.

2-10. a.

b.

2-11. a.

b.
 c. It is likely that some customers who receive defective orders will not return, thus, fewer
defective orders will retain more customers and also increase the number of orders.

2-12. a.

b.

2-13.
With defects:

Without defects (six sigma):

The slope of the line is steeper with a reduced break-even point; the company can make more
money without selling additional units.

2-14.
With a 0% defect rate:

Sales $151,200
Variable costs 61,200
Fixed costs 31,000
Profit $59,000
 With zero defects:
Sales $151,200
Variable costs 56,305
Fixed costs 31,000
Profit 63,895

Six sigma results in an 8% reduction in variable costs and a corresponding 8% increase in profit.
The return on the six sigma investment would be:

2-15.

A possible version of the cause and effect matrix:

2-16: missing?
CASE 2.1: Designing a Quality Management Program for the Internet at
D4Q
This can be an instructive, hands-on case project. The students should first search the Internet for
different web sites at which retail items can be ordered. They should next develop a list of quality
characteristics or dimensions to focus on. These might include the visual appearance of the web site, the
friendliness of the language used, the accuracy of instructions, the availability of e-mail or telephone
support, etc. An attractive web site should probably include photos of the catalog items, for example
book jackets, CD covers and video jackets, instead of just item titles. Instructions for ordering should be
detailed and accurate with help icons located at every step. Customer support should be easy to access
with e-mail or by telephone. Responses to requests for support should be quick. Service measurement is
difficult in this type of operation. If an order center is used then the company can count the number of
customers who enter the center then abort as the result of poor instructions. Follow up surveys of
customers who place orders or request hard copy catalogs is a good way to evaluate service. From the
server end, the server responses to customer inquiries can be monitored for accuracy, completeness and
timeliness. These are just a few of the possible quality initiatives you might suggest to develop a high
quality web site ordering system.

CASE 2.2: Quality Management at State University

In general the student should respond to this case by attempting to go through the chapter and to discuss
each major topic in terms of a university environment. This will require that they first identify the
product and the process, obviously the student and the educational process. However, in a university
environment, is the product also the customer? This is an interesting question to begin with.

An initial step should be to develop a customer definition of quality—that is, what are the dimensions of
quality in an education that parents, students, and legislators expect? This step can be accomplished by
surveying alumni, potential employers, parents, students, and legislators. It would also be beneficial to
see what the competition (other colleges and universities) does.

The various support functions in the university should be identified in terms of a production process. For
example, the admissions office is analogous to the purchasing department. A key problem here in a QM
approach is that the university has little, if any, control over suppliers (high schools). As a result,
admissions must institute inspection and process control procedures to ensure high-quality raw material
(i.e., students), is admitted.

The product-design function, or curriculum design, is typically decentralized in a university among

various colleges and departments. In some cases, the university administration will design a core
curriculum for the first two years and college and departments will design the curriculum for the last two.

The production process is the movement of students through the curriculum to graduation. Discussion
should focus on how to institute process control in order to avoid final product “defects.” This obviously
requires a definition as to what a defective item is—a student who enters but fails to graduate, a student
who graduates but does not gain employment, or a graduate who indicates disappointment with his or her
education five years from now. An area on which to focus is the degree to which quality control tools
such as brainstorming, quality circles, histograms, check sheets, and fishbone diagrams can be used to
evaluate the process.

Customer service would seem to be an integral part of a QM approach in the university. This service
would focus on support services such as dining, recreation, housing, advising, counseling, extracurricular
activities, entertainment, placement, alumni services, etc.

Depending on the time designated to spend on this case, students might interview various administrators
at their own university to determine where QM can be applied in the university and obstacles to a TQM
approach.
CASE 2.3: Quality Problems at the Tech Bookstore
a. Mr. Watson’s organization of the customer survey categorized the two bookstores and types of
customer, i.e., students and non-students. He differentiated between the two stores because they
carried different products, and it also was likely that a different population of customers visited the
two stores since they were in different locations. Also, the two stores had different managers, staff and
employees; in effect they were separate entities. He differentiated between the two customer groups
because he knew they likely had different characteristics and different service expectations. Also, it
was probable that they shopped for different items. Student would be primarily interested in
textbooks, school supplies, computer items and apparel, whereas non-students would have not been as
interested in textbooks and school supplies, and they would have had a higher interest in trade books.
A customer survey was probably the best way to start in order to see if there was a quality problem
and its extent. He might also analyze different processes in the store, such as employee floor service,
checkout, etc. He could have probably gotten the help of an OM class on campus to help him analyze
various service processes in the store. He could also benchmark other “successful” college bookstores.

b. It is possible to develop 9 different Pareto charts—a chart each for students and non-students at the
campus store, and a chart each for students and non-students at the off-campus store; a combined chart
for students at both stores and a combined chart for non-students at both stores; a chart for each store
combining the two customer groups at each one; and a summary chart combining all the data for both
stores and both customer categories. Following is a summary of the survey data.

c. Using a fitness for use definition, quality should be prompt, knowledgeable and courteous customer
service; a pleasant shopping environment with prompt and courteous customer checkout; and quality
products at a competitive (or lower) price.

d. The most pronounced problem is the discrepancy between the student and non-student groups in their
perception of service. This is likely due to the different expectations of the two groups. Non-students
are likely to be older and less patient. The student employees’ attitude and demeanor is probably more
familiar to other students, i.e., what they are used to, and they are probably more patient with the
student employees than the non-student group. Also it is less likely that students will ask questions
than the non-student group so the problem of not being helpful or knowledgeable does not come up as
much with students as with non-students. It also may be that students visit the bookstores more often
and know where to find items, and they may also be more familiar with bookstore policies. Many of
the non-student customers could be visitors.
However, this discrepancy does not hide two other potential quality problems—that the off campus
store has poorer quality service across all categories than the on-campus store, and there seems to be a
significant problem with employee training at both stores. The relatively low percentage of customers
who think employees are knowledgeable and helpful, reinforced by the graduate student evaluators and
the complaint incidents to the Board, clearly indicates that the student employees are not adequately
prepared to do their job. They are probably in need of more training, however it is likely the bookstore
has been hesitant to provide additional training because of the high turnover rate, i.e., the return on
training investment might be perceived by management to be low when student employees leave after
a semester or two. The off campus store may have poorer quality service, in general, because of the
management staff, and the fact that the Executive Director resides at the on campus store.
The much lower percentage of students who think that the cost of purchases at the bookstores is
reasonable is probably due to the fact that students purchase textbooks, which are expensive. The
bookstore probably does not do a very good job of publicizing the fact that it has a very low mark up
on textbooks. This is something that could be highlighted on the store web site, which the students
access more than non-students.
e. Since this is a service several of the costs of poor quality that relate to manufactured products such as
scrap, product rework, returned products, etc., do not apply. Thus, the two primary costs of poor
quality are lost sales and customer complaint costs. The costs the bookstore is incurring to conduct the
customer survey, hire the graduate student evaluators, and analyze the results are all costs of poor
quality. From the limited information provided it is difficult to address the question of lost sales.
However, it is noted that that the town and university have been growing while sales have remained
steady. Given the ideal location of the on campus store in particular, and the fact that the football team
is very successful should mean much higher sales of licensed apparel. It could be that the quality
problems are having a very negative impact on sales.

f. While the bookstores would benefit from a complete QM program, the most immediate need is for a
more extensive employee training program. The bookstore needs to establish a plan for improving its
quality that includes employee training as a top priority. The plan needs tangible objectives. For
example, every customer question should be answered as promptly as possible. Some form of reward
system for employees might be beneficial. They likely would benefit from a set of guidelines for
employees for addressing customer questions. Having a resource person available that has intimate
knowledge of all aspects of store policies, and knows where all items are in the store, that the student
employees could contact at any time would be a good personnel investment. In addition, management
needs to establish a process for monitoring employee performance on a routine, daily basis.
Benchmarking other college bookstores could provide insight into ways to solve quality problems. A
process for measuring customer and employee satisfaction on a regular basis needs to be put into
effect, and performance measures could be tied to these surveys.

g. Because the bookstores are quasi non-profit, government-type entities, the revenue pressures that a
business might feel are not present. Thus, the motivation for improved quality is primarily the store’s
reputation. Another factor is the university-invoked policy of hiring students on a part-time basis. This
means that to solve the quality problems associated with part time students, bookstore management
must look to other solutions besides hiring more-experienced, full-time employees. The fact that
students will be serving adults is a situation that cannot be changed.

h. The most probable benefit would be an increase in sales and revenue. However,
employee satisfaction would also likely increase as a result of a quality management
program. Also, the Board of Directors would likely receive fewer complaints.
 Campus Store Off Campus Store
Student Non-student Student Non-student Total
Yes No Yes No Yes No Yes No Yes No

% % % % % % % % % %
Were employees courteous and friendly? 86 14 67 33 75 25 52 48 73 27

Were employees knowledgeable and 79 21 52 48 77 23 41 59 65 35

helpful?

Was the overall service good? 86 14 63 37 71 29 55 45 71 29

Did you have to wait long for service? 11 89 45 55 11 89 46 54 25 75

Did you have to wait long to checkout? 12 88 46 54 16 84 45 55 27 73

Was the item you wanted available? 92 8 84 16 90 10 90 10 89 11

Was the cost of your purchase(s) 58 42 90 10 60 40 92 8 72 28

reasonable?

Have you visited the store web site? 50 50 12 88 58 42 5 95 41 59

42 5 95 41 59
CASE SOLUTION 2.4 - Product Yield at Continental Luggage Company

Average Weekly Yield

Increasing Good Quality Yield by 1% at Each Stage