Producers might measure the conformance quality, or degree to which the product/service was produced correctly. Support personnel may measure quality in the degree that a product is reliable, maintainable, or sustainable. Simply put, a quality item (an item that has quality) has the ability to perform satisfactorily in service and is suitable for its intended purpose. There are five aspects of quality in a business context: Producing – providing something. Checking – confirming that something has been done correctly.
Quality Control – controlling a process to ensure that the outcomes are predictable. Quality Management – directing an organization so that it optimizes its performance through analysis and improvement. Quality Assurance – obtaining confidence that a product or service will be satisfactory. (Normally performed by a purchaser) Quality applied in these forms was mainly developed by the procurement directorates of NASA, the military and nuclear industries from the sass and this is why so much emphasis was placed on Quality Assurance.
The original versions of Quality Management System Standards (eventually merged to ISO 9001) were designed to contract manufacturers to produce better rodents, consistently and were focused on Producing, Checking and Quality Control. The subsequent move of the Quality sector towards management systems can be clearly seen by the aggregation of the product quality requirements into one eighth of the current version of ISO 9001.
This increased focus on Quality Management has promoted a general perception that quality is about procedures and documentation. Similar experiences can be seen in the areas of Safety Management Systems and Environmental Management Systems. Managing quality is fundamental to any activity and having a clear understanding of the five aspects, measuring performance and taking action to improve is essential to an organizations survival and growth. To Impulse Light quality means the excellence of service to the customers.
This includes getting customers’ order correctly, being able to suggest alternatives to customers through sophisticated computer system that impulse light uses, giving its customers any relevant information about products they order such as whether it is available immediately or any changes in the product design. B. Speed means the elapsed time between customers requesting products or services and achieving them. The faster the customers can have the product or service, the more likely they are to buy it, or the more they will pay for it.
Speed reduces inventories. Speed reduces risks. Forecasting tomorrows events is fearless of a risk than forecasting next year’s. Speed again has different interpretations, externally and internally. Externally it means the elapsed time between a customer asking for a product or service and getting it (in a satisfactory condition). It often enhances the value of the product or service to customers. Internally it brings other benefits to the operation: It helps to overcome internal problems by maintaining dependability.
It reduces the need to manage transformed resources as they pass through the operation, therefore saving cost (Slack, et al 2007) Speed to Impulse Light refers to the time it will take for customers to place an order for lamps and the time they actually receive them. Speed is central to Impulse Light’s ability to provide the services its customers expect with the computerized stock management system. The system holds information on all Impulse Light’s customers, the type of lamps they may order, the quality and brand they prefer, the price to be charged and the location of ACH item in the warehouse.
When a customer phones in to order, the computer system immediately accesses all this information, which is confirmed to the customer. All these are done within a limited time. This performance objective also influences Impulse Light to forecast the demand for their products and stock the optimum amount in order to render quick services to their customers to ensure customer loyalty. C. From a business perspective, dependability describes the extent to which something can be trusted to behave as expected.
Although the concept of dependability can be applied in many different situations, in this intent, it is intended to apply to a technological system, product or service. The success of a technological system, product or service is determined by a number of performance attributes. These attributes are described by terms such as capability, safety, integrity, durability, survivability, serviceability, risk, quality, environmental sustainability, vulnerability, readability, accessibility, regulatory compliance, security, cost, disability and so on. Dependability is somewhat unique in that it enables many of them to be achieved.
For example, safety is enhanced when failures are eliminated or minimized. In the past, dependability has been aimed primarily at specific functionality and safety but this now needs to be expanded more broadly. This of course could just be a matter of perception because it can be argued that functionality includes all of these attributes. It is possible to consider dependability as an independent performance attribute but maybe it is more correct to understand it as a characteristic that defines how well the basic performance attributes of a system, product or service can be achieved.
As mentioned above dependability to Impulse Light is its ability to stick to TTS explicit or implicit delivery times in order not to disappoint its customers in anyway whatsoever. From the case we are informed that the size of replenishment order depends on the lamp being ordered. Flame prefers most orders to be for a whole number of containers loads (the shipping costs for part- container loads being more expensive). However lower order quantities of small or expensive lamps may be used. The order quantity for each lamp is based on its demand, its value and the cost of transportation from the suppliers.
There are times this can be overridden, especially in an emergency. If a customer, such as a hospital, urgently needs a particular lamp which is not in stock, the company will even use a fast courier to fly the item in from overseas – all for the sake of maintaining its reputation for high service levels. D. Flexibility is characterized as a complex process since there is disagreement about its concept and definition. For this reason, Seth and Seth (1990) consider it as a complex multidimensional concept, which is hard to capture.
Furthermore, Upton (1994), points out that flexibility has been an elusive quality in manufacturing an operations. The ERM is used for many purposes, each of which characterizes different quality or capability of a system. The taxonomies of flexibility are useful, in that they provide general types that can be used to distinguish one form of flexibility from another. These categorization have been an important step in providing better understanding when managers deal with them depending on their concerns (Upton, 1994).
Based on the above review of flexibility, we agree with the following scholars as they categorize flexibility: Product flexibility The ability to introduce novel products, or to modify existing ones (Slack, 1987). Is the ease with which new parts can be added or submitted for existing ones (Seth and Seth, 1990). Volume flexibility The accommodation of shifts in production for a given part (Gearing, 1982). The ability to vary production with no detrimental effect on efficiency and quality (Square et al. , 1995). Is the ability of a manufacturing system to be operated profitably at different overall output levels, thus allowing the factory to adjust production within a wide range (Guppy and Somers, 1996). The ability to operate efficiently, effectively and profitably over a range of volumes (Parker & Worth 1999). The ability to rapidly adjust capacity so as to accelerate production in response to changes in customer demand (Vickers and Collation, 1999). The ability of a manufacturing system to vary aggregate production volume economically (Maharanis and Ads, 2000). The ability of the organization to operate at various batch sizes and/or at different production output levels economically and effectively (Ghana et al. , 2002). It is upon these definitions that we have concluded that Flexibility is Impulse Lights’ reason for existing. Flexibility to Impulse Light means going beyond its normal procedures in an emergency such as when a hospital wants a special lamp as enumerated in the case. Also, its ability to find substitute products for its customers when their first choices are not available and the ability for the company to change its level of output when demand fluctuates.
E. In production, research, retail, and accounting, a cost is the value of money that has been used up to produce something, and hence is not available for use anymore. In business, the cost may be one of acquisition, in which case the amount of money expended to acquire it is counted as cost. In this case, money is the input that is gone in order to acquire the thing. This acquisition cost may be the sum of the cost of production as incurred by the original producer, and further costs of transaction as incurred by the acquirer over and above the price paid to the producer.
Usually, the price also includes a mark-up for profit over the cost of production. (Has and Candela, 1984), More generalized in the field of economics, cost is a metric that is totaling up as a result of a process or as a differential for the result of a decision (Arthur and Suffering, 2003). Hence cost is the metric used in the standard modeling paradigm applied to economic processes. Operating costs are the expenses which are related to the operation of a business, or to the operation of a device, component, piece of equipment or facility.
They are the cost of resources used by an organization just to maintain its existence. To Impulse Light cost is the working capital of holding the stock till customers demand for them and also the cost of the warehouse and the computerized system which takes inventory decision. All these costs have been taken care of just to make sure customers are satisfied and overall operational cost has been minimized in the long run so as to examine profit. Question 2 The most important of the performance objectives for Impulse Light is the working capital cost of holding the stock till customers demand for them.
This has been highlighted by Pandora Ahem, the Managing Director of Impulse Light, when she accentuated “After all we are carrying the cost of every lamp in our warehouse until the customer eventually pays for it”. This also why the company even pays incentives on how well costs and working capital are kept under control. Another important performance objective for Impulse Light is ‘excellent service’. Of course this is expensive but the ability to manage this quick service is more valuable than the money they even make even if they do not earn enough for the order.
Partly this is quality but it is also availability. Availability is a combination of speed and dependability. Flexibility and speed are their way of differentiating in the sector. Question 3 The leading time seems to influence the stock replenishment policy of Impulse Light. This is calculated from previous experience and due to seasonal demand. Goods which may not exist in stock in emergency situations may also be provided. The company also uses the re-order point system. In other words, when stocks of items go below certain points they are re-ordered.
The re-order points for Impulse Light are set on the basis of predicted demand, the order lead time, the variability of lead time, the physical size of the lamp and the transportation cost. Question 4 Economic order quantity is the order quantity that minimizes total inventory holding costs and ordering costs. It is one of the oldest classical production scheduling models. The framework used to determine this order quantity is also known as Wilson EGO Model or Wilson Formula. The model was developed by Ford W. Harris in 1913 (Harris, 1990).
OX applies only when demand for a product is constant over the year and each new order is delivered in full when inventory reaches zero. There is a fixed cost for each order placed, regardless of the number of units ordered. There is also a cost for each unit held in storage, commonly known as holding cost, sometimes expressed as a percentage of the purchase cost of the item. We want to determine the optimal number of units to order so that we minimize the total cost associated with the purchase, delivery and storage of the product.
The required parameters to the solution are the total demand for the year, the purchase cost for each item, the fixed cost to place the order and the storage cost for each item per year. Note that the number of times an order is placed will also affect the total cost, though this number can be determined from the other parameters. The following are its underlying assumptions: The ordering cost is constant. The rate of demand is known, and spread evenly throughout the year. The lead time is fixed. The purchase price of the item is constant i. E. o discount is available The blandishment is made instantaneously, the whole batch is delivered at once. Only one product is involved. EGO is the quantity to order, so that the sum of ordering cost and holding cost is at its minimum. These costs will be equal to one another at the minimized cost point. The group agree that Impulse Lights’ main departure from conventional EGO theory is the influence of the ‘container load’ in the case. Since shipping items where the total load is less than a full container is relatively expensive the theoretical economic order quantity is slightly less than a full container dad.
