Post on 14-Apr-2018
7/27/2019 Quality & Inventory Control - Ppt
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1.) Product quality control (sometimes called
acceptance control) – relates to inputs or
outputs of the system; used when quality isevaluated with respect to a batch of existing
products or services.
Product quality control lends itself to
acceptance sampling procedures, in which
some portion of a batch of outgoing items (or
incoming materials) is inspected to ensurethat the batch meets specifications with
regard to the percentage of defective units
that will be tolerated in the batch.
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2.) Process quality control – concerns
monitoring quality while the product or
service is being produced.
Under process control, periodic samples are
taken from a process and compared to apredetermined standard.
Process control relates to the control of the
equipment and processes used during the
production process.
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Under process control, periodic samples are
taken from a process and compared to a
predetermined standard. If the sampleresults are acceptable, the process is
allowed to continue. If the sample results
are not acceptable, the process is halted and
adjustments are made to bring the machines
or processes back under control.
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Acceptance sampling - is a method of
predicting the quality of a batch or a large
group of products from an inspection of asample or group of samples taken from the
batch. Acceptance sampling is used for one
of three basic reasons:
1.The potential losses or costs of passing
defective items are not great relative tothe cost of inspection; for example it
would not be appropriate to inspect every
match produced by a match factory.
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2) Inspection of some items requires
destruction of the product being tested, as is
the case when testing prepared food items.
3) Sampling usually produces results more
rapidly than does a census.
If more than a certain number (determined
statistically) are found to be defective, theentire batch is rejected, as it is deemed to
have an unacceptably large percentage of
defective items.
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Because of the possibility of making an
incorrect inference concerning the batch,
acceptance sampling always involves risks:
a)Producer’s risks – the risk the producer is
willing to take of rejecting the good batch.
b) Consumer’s risks – the risk of accepting abad batch.
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The only method of simultaneously
lowering both of these risks is to increasethe sample size, which also increase theinspection costs.
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Inventories
– quantity of raw materials, in-process
goods, or finished good on hand;
- serves as a buffer between different
rates of flow associated with the operating
system.
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Raw material inventories serve as a buffer
between purchasing and production.
In-process inventories are used to buffer
differences in the rates of flow through the
various production processes.
Finished-goods inventories act as a buffer
between the final stage of production andshipping.
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Inventories add flexibility to the operating
system and allow the organization to do the
following:1.) Purchase, produce, and ship in economic
lot sizes rather than in small jobs.
2.) Produce on a smooth, continuous basiseven if the demand for the finished product
or raw material fluctuates.
3.) Prevent major problems when forecasts of demand are in error or when unforeseen
slowdowns or stoppages in supply or
production occur.
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Just-in-Time Inventory Control (JIT)
– was pioneered in Japan but has become
popular in the United States.
- Sometimes referred to as zero
inventory systems, stockless systems, or kanban systems. JIT is a philosophy for
production to ensure that the right items
arrive and leave as they are needed.
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- Under JIT, organizations make smaller
and more frequent orders of raw materials.
- It is also called a demand pull system
because items are produced or ordered onlywhen they are needed by the next stage in
the production process.
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Benefits of JIT System
1) Inventory levels are drastically lowered.
2)The time it takes products to go throughthe production facility is greatly reduced.
This enables the organization to be more
flexible and more responsive to changingcustomer demands.
3)Product/service quality is improved and
the cost of scrap is reduced becausedefective parts and services are discovered
earlier.
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4) With smaller product batches, less space
is occupied by inventory and materials-
handling equipment. This also allowsemployees to work closer together, which
improves communication and teamwork.
In other words, by examining and solving
customer’s problems by supplying them with
exactly what they need, the company notonly improves its quality but also builds ties
to its customer base.
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Tracking Inventory
A.) Bar-Code Technology
- Changed the way business track
inventory
- Bar coding has reduced errors in
tracking inventory
- Computer program recognizes the
information contained in the bar code and
automatically adds or subtracts the item
from inventory.
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B.) Physical Inventory
- Involves counting the number of units
of inventory a company holds in stock.- Managers need to conduct physical
inventories because actual inventory is
often different from the level of inventorytracked.
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Safety Stocks
– inventory maintained to accommodate
unexpected changes in demand and supplyand allow for variations in delivery time.
The optimal size of the safety stock isdetermined by the relative costs of an out-
of-stock item versus the costs of carrying the
additional inventory.