One of the new thrusts of quality control management is to examine the process by which a product is produced. This approach also applies to paperwork. In industries where large long-term projects are undertaken, days and even weeks may elapse as a change order makes its way through a maze of approvals before receiving final approval. This process can result in long delays and stretch schedules to the breaking point. Suppose a quality control consulting group claims that it can significantly reduce the number of days required for such paperwork to receive an approval. In an attempt to “prove” its case, the group selects five jobs for which it revises the paperwork system. The following data show the number of days required for a change order to be approved before the group intervened and the number of days required for a change order to be approved after the group instituted a new paperwork system. Before After 12 8 7 3 10 8 16 9 8 5 Use alpha = 0.05 to determine whether there was a significant drop in the number of days required to process paperwork to approve change orders. Assume that the differences in days are normally distributed. What is the appropriate critical value for this problem for alpha = 0.01? 4.6041 4.0321 3.3649 4.5407 3.7469
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Null hypothesis (H0): There is no significant difference in the number of days required to process paperwork before and after the intervention (μd = 0). Alternative hypothesis (H1): There is a significant difference in the number of days required to process Show more…
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Quality Function Deployment Customer Demands versus Organizational Capabilities "I don't know why we keep collecting all this customer input and feedback. It's clear they want a better product than our processes can produce," said Derrick Kramer, CEO of Ronkel Inc. "That's true," said Linda Carver, Ronkel's director of quality. "But we are going to lose our customers if we don't improve our processes. We need to do more than collect customer feedback. We need to use it to keep our processes up-to-date." Clearly, Ronkel needs to translate customer demands into process improvements. 1. Explain how QFD could be used to help this company. 2. How should Kramer and Carver proceed if they choose to apply QFD? SPC's Effect on Competitiveness The government invites two companies to bid for a contract to produce 100 flightline avionics maintenance systems. The design is owned by the air force, and the air force will provide all necessary documentation to the successful bidder. Both companies understand the requirements of the contract, and both are equipped and have the know-how to manufacture the devices. Company ABC, with no SPC experience, develops a conservative proposal, accounting for 25% rework in its manufacturing labor costs, padding materials costs by 10% in anticipation of scrappage, and allowing for inspection sufficient to smoke out most of the defects—calculated at 20% of the basic manufacturing labor. Company XYZ, which uses SPC in all its manufacturing processes, bids rework and scrap at much lower rates and includes only enough inspection to audit processes and meet the customer's own minimum inspection criteria. The following chart compares the bids from the two companies: Company ABC Company XYZ Assembly Labour $200,000 $200,000 Rework labour 50,000 (25%) 8,000 (4%) Inspection labour 40,000 (20%) 4,000 (2%) Materials 550,000 505,000 Totals $840,000 $717,000 With a difference of $123,000, there can be no doubt that Company XYZ will win the contract. Not only is Company ABC's bid 17% higher, but also one would be safe in predicting that its higher-priced product would be inferior to XYZ's product. SPC is the only difference here. DISCUSSION QUESTIONS 1. How would you rate the comparative competitiveness of the two companies? 2. If you work for a company that does not employ SPC, how could SPC help the firm?
Sri K.
CASE Jim Wells, vice-president for manufacturing of the Northern Airplane Company, is exasperated. His walk through the company’s most important plant this morning has left him in a foul mood. However, he now can vent his temper at Jerry Carstairs, the plant’s production manager, who has just been summoned to Jim’s office. “Jerry, I just got back from walking through the plant, and I am very upset.” “What is the problem, Jim?” “Well, you know how much I have been emphasizing the need to cut down on our in-process inventory.” “Yes, we’ve been working hard on that,” responds Jerry. “Well, not hard enough!” Jim raises his voice even higher. “Do you know what I found by the presses?” “No.” “Five metal sheets still waiting to be formed into wing sections. And then, right next door at the inspection station, 13 wing sections! The inspector was inspecting one of them, but the other 12 were just sitting there. You know we have a couple hundred thousand dollars tied up in each of those wing sections. So between the presses and the inspection station, we have a few million bucks worth of terribly expensive metal just sitting there. We can’t have that!” The chagrined Jerry Carstairs tries to respond. “Yes, Jim, I am well aware that that inspection station is a bottleneck. It usually isn’t nearly as bad as you found it this morning, but it is a bottleneck. Much less so for the presses. You really caught us on a bad morning.” “I sure hope so,” retorts Jim, “but you need to prevent anything nearly this bad happening even occasionally. What do you propose to do about it?” Jerry now brightens noticeably in his response. “Well actually, I’ve already been working on this problem. I have a couple proposals on the table and I have asked an operations research analyst on my staff to analyze these proposals and report back with recommendations.” “Great,” responds Jim, “glad to see you are on top of the problem. Give this your highest priority and report back to me as soon as possible.” “Will do,” promises Jerry. Here is the problem that Jerry and his OR analyst are addressing. Each of 10 identical presses is being used to form wing sections out of large sheets of specially processed metal. The sheets arrive randomly to the group of presses at a mean rate of 7 per hour. The time required by a press to form a wing section out of a metal sheet has an exponential distribution with a mean of 1 hour. When finished, the wing sections arrive randomly at an inspection station at the same mean rate as the metal sheets arrived at the presses (7 per hour). A single inspector has the full-time job of inspecting these wing sections to make sure they meet specifications. Each inspection takes her 7.5 minutes, so she can inspect 8 wing sections per hour. This inspection rate has resulted in a substantial average amount of in-process inventory at the inspection station (i.e., the average number of wing sheets waiting to complete inspection is fairly large), in addition to that already found at the group of machines. The cost of this in-process inventory is estimated to be $8 per hour for each metal sheet at the presses or each wing section at the inspection station. Therefore, Jerry Carstairs has made two alternative proposals to reduce the average level of in-process inventory. Proposal 1 is to use slightly less power for the presses (which would increase their average time to form a wing section to 1.2 hours), so that the inspector can keep up with their output better. This also would reduce the cost of the power for running each machine from $7.00 to $6.50 per hour. (By contrast, increasing to maximum power would increase this cost to $7.50 per hour while decreasing the average time to form a wing section to 0.8 hour.) Proposal 2 is to substitute a certain younger inspector for this task. He is somewhat faster (albeit with some variability in his inspection times because of less experience), so he should keep up better. (His inspection time would have an Erlang distribution with a mean of 7.2 minutes and a shape parameter k = 2.) This inspector is in a job classification that calls for a total compensation (including benefits) of $19 per hour, whereas the current inspector is in a lower job classification where the compensation is $17 per hour. (The inspection times for each of these inspectors are typical of those in the same job classification.) You are the OR analyst on Jerry Carstairs' staff who has been asked to analyze this problem. He wants you to "use the latest OR techniques to see how much each proposal would cut down on in-process inventory and then make your recommendations." To provide a basis of comparison, begin by evaluating the status quo. Determine the expected amount of in-process inventory at the presses and at the inspection station. Then calculate the expected total cost per hour when considering all of the following: the cost of the in-process inventory, the cost of the power for running the presses, and the cost of the inspector. (25 Pts) What would be the effect of proposal 1? Why? Make specific comparisons to the results from part (a). Explain this outcome to Jerry Carstairs. (25 Pts) Determine the effect of proposal 2. Make specific comparisons to the results from part (a). Explain this outcome to Jerry Carstairs. (25 pts) Make your recommendations for reducing the average level of in-process inventory at the inspection station and at the group of machines. Be specific in your recommendations and support them with quantitative analysis like that done in part (a). Make specific comparisons to the results from part (a), and cite the improvements that your recommendations would yield. (25 Pts)
Q3. UNION AIRWAYS is adding more flights to and from its hub airport, and so it needs to hire additional customer service agents. However, it is not clear just how many more should be hired. Management recognizes the need for cost control while also consistently providing a satisfactory level of service to customers. Therefore, an OR team is studying how to schedule the agents to provide satisfactory service with the smallest personnel cost. Based on the new schedule of shifts, an analysis has been made of the minimum number of customer service agents that need to be on duty at different times of the day to provide a satisfactory level of service. The rightmost column of the table shows the number of agents needed for the time periods given in the first column. The other entries in this table reflect one of the provisions in the company's current contract with the union that represents the customer service agents. The provision is that each agent works an 8-hour shift 5 days per week, and the authorized shifts are: Shift 1: 6:00 A.M. to 2:00 P.M. Shift 2: 8:00 A.M. to 4:00 P.M. Shift 3: Noon to 8:00 P.M. Shift 4: 4:00 P.M. to midnight Shift 5: 10:00 P.M. to 6:00 A.M. Checkmarks in the main body of the table show the hours covered by the respective shifts. Because some shifts are less desirable than others, the wages specified in the contract differ by shift. For each shift, the daily compensation (including benefits) for each agent is shown in the bottom row. The problem is to determine how many agents should be assigned to the respective shifts each day to minimize the total personnel cost for agents, based on this bottom row, while meeting (or surpassing) the service requirements given in the rightmost column.
Dominador T.
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