Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

MIDTERM EXAMINATION
Course: Quality Management - Monday morning Class
Lecturer: MSc. Duong Vo Nhi Anh
Name: Nguyen Thuy Hanh Duyen
Student ID: IELSIU18242
Question 1:

Using Deming’s methodologies, companies around the world have achieved new levels of
performance and quality. After applying Deming's techniques, Japanese businesses like Toyota, Fuji,
and Sony saw great success. Their quality was far superior to that of their global competitors, and
their costs were lower. The demand for Japanese products soared – and by the 1970s, many of
these companies dominated the global market. American and European companies realized that
they could no longer ignore the quality revolution. Therefore, 14 points of Deming have become a
standard reference for quality transformation:
Point 1: Create a Vision and Demonstrate Commitment
 An organization must define its values, mission, and vision of the future to provide long-
term direction for its management and employees.
 Businesses should not exist simply for profit; they are social entities whose basic purpose is
to serve their customers and employees.

The customer is the most important part of transportation service. Customer demands are always
changing. It is mistaken to presume that services offered at present can keep an organization
solvent and ahead of competition. The transportation agency should propose a constancy of
purpose by prioritizing the customer. The transportation organization’s highest priority must be to
provide the best transportation services to its community at the lowest cost possible. Therefore, the
transportation organization must strive to maximize efficiency and effectiveness through constant
improvement. To create a constancy of purpose necessitates the development of a mission
statement for the transport corporation. The company should propose innovation by putting
resources into research, education and maintenance of the transportation system. Innovation
generates new and improved services.

Point 2: Learn the New Philosophy

 Companies must take a customer-driven approach based on mutual cooperation between
labor and management and a never-ending cycle of improvement.
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

Business cannot survive with commonly accepted levels of mistakes, defects, people on the job who
do not understand the job and are afraid to ask questions, and management’s failure to understand
problems within the corporation. Each individual in the transportation industry can find ways to
promote quality and efficiency, to improve all aspects of the transportation system. Employees
should adopt a new work philosophy by meeting in cross-functional teams or quality circles to set
priorities for staff training. Employee can witness the trend in the sales & customer behavior of
each quarter and develop a network design & routing plan to minimize transportation cost and
optimize resources.
Point 3: Understand Inspection
Point 4: Stop Making Decisions Purely on the Basis of Cost
Point 5: Improve Constantly and Forever
 Improved design of goods and services comes from understanding customer needs and
continual market surveys and other sources of feedback, and from understanding the
manufacturing and service delivery process.
 Improvements in operations are achieved by reducing the causes and impacts of variation
and engaging all employees to innovate and seek ways of doing their jobs more efficiently
and effectively.
 Deming chain reaction: When quality improves, productivity improves, and costs decrease.
 Continuous improvement

Continuous examination is essential to identify potential improvements. This requires close

cooperation between those who provide the services and those who consume them. Improvement
is not a one-time effort. Management is obligated to look continually for ways to reduce waste and
improve quality. Every worker and every department must commit to constant improvement.
Quality circles/cross-functional teams work together to improve transport service delivery. These
groups may use basic quality tools to identify issues that need attention. For example, which faults
are local and which ones belong to the system? The responsibilities should be given where this fault
belongs. The use of statistical quality tools helps to identify trouble spots and their sources. Quality
circles/teams continuously work to meet the needs of the people they serve, resulting in lower
costs and improved quality of transport operations and services. Thus, improved transport service
can result from focusing not only on achieving present performance levels, but more importantly,
by breaking through existing performance levels to higher levels.
Point 6: Institute Training
Training
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

- results in improvements in quality and productivity

- adds to worker morale
- demonstrates to workers that the company is dedicated to helping them and investing in
the future.
Quality circles help the human resource division to select training programs that increase the job
skills of both main and support staff. Training must be totally reconstructed. Statistical methods
must be used to learn when training is finished and when further training would be beneficial. On-
the-job quality improvement training ensures that every employee has a thorough understanding
of the job positions’ area, which enhances productivity and better work results.
Point 7: Institute Leadership
Point 8: Drive Out Fear
Point 9: Optimize the Efforts of Teams
Point 10: Eliminate Exhortations
Point 11: Enumerate Numerical Quotas and Management by Objective (MBO)
Point 12: Remove Barriers to Pride in Workmanship
Point 13: Encourage Education and Self-Improvement
 Continuing, broad education for self-improvement
 Organizations must invest in their people at all levels to ensure success in the long
term
 Developing the worth of the individual is a powerful motivation method

The transport organization needs not only good people, but people who are growing through
education and life experiences as well. Both management and employees must continuously
acquire and skills. They should be educated in new methods, including teamwork and statistical
techniques. For instance, employees may receive monthly training to acquire their skills to cope
with tasks and challenges.
Point 14: Take Action

Question 2:

The Taguchi Loss Function:

L(y) = k(y-m)2

Y: the value of the quality characteristic for a particular item.

Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

M: the nominal value for the quality characteristic.

y L(y) k = A/d2 (constant)
800 55.556
810 45.000 A: the cost of exceeding specification limits.
820 35.556 D: the allowable tolerance from “m”.
830 27.222
840 20.000 m = 900 mm
850 13.889
d = 30 mm
860 8.889
870 5.000 A = $5
880 2.222
890 0.556
900 0.000
910 0.556
920 2.222
Loss No loss Loss
930 5.000
940 8.889
950 13.889 900
960 20.000
Tolerance
970 27.222 870 930
980 35.556
990 45.000
1000 55.556
y L(y)
800 55.556
810 45.000

Every chair higher or lower than 900 mm causes a loss:

( dA ) ( y−m ) =( 30$ 5 ) ( y −900)

L ( y )= 2
2
2
2

L ( y )=5.5 55∗10(−3) ( y−900 )2($)

Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

L(y)
60.000

50.000

40.000

30.000

20.000

10.000

0.000
0 5 10 15 20 25 30

--> Under the Taguchi Loss Function the continuous reduction of unit-to-unit variation around the
nominal value is the most economical course of action.

Managers must continually strive to reduce variation in product characteristics for all market
segments

Once the specification limits are reached the loss suddenly becomes positive and constant,
regardless of the deviation from the nominal value beyond the specification limits.

Under the Taguchi Loss Function the continuous reduction of unit-to-unit variation around the
nominal value is the most economical course of action, absent capital investment
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

The company should try to stay at the nominal value because there is the smallest cost.

Continuously make improvement through variability reduction, with the purpose of

focusing on the perfect product for the client.

The company may seek for higher quality materials, components, or machinery to ensure tight
tolerance range. For long term purposes, the manager may try to propose innovations in design of
experiments. On the other hands, it is advisable that lean production should be applied to improve
products’ quality and minimize production costs.

Question 3:

We have:

Number of samples = 20

Sample size n = 500

Z=2

Process average:

total defectives 396

ṕ= = =0. 0 396
total sample observations 20∗5 00

Upper control limit

ṕ(1− ṕ) 0.0396(1−0.0396)

UCL= ṕ+ z
√ n √
=0. 0 396+2
500
=0.05704

Lower control limit:

We have:

Number of defectives
Proportion defectives=
Sample ¿ ¿ ¿
For Sample 1:
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

Number of defectives
Proportion defectives=
15
Sample ¿ ¿ =0 .03¿
500

SAMPLE NUMBER OF PROPORTION DEFECTIVE

DEFECTIVES
1 15 0.030
2 10 0.020
3 17 0.034
4 17 0.034
5 12 0.024
6 10 0.020
7 7 0.014
8 22 0.044
9 23 0.046
10 37 0.074
11 40 0.080
12 20 0.040
13 38 0.076
14 19 0.038
15 22 0.044
16 15 0.030
17 17 0.034
18 9 0.018
19 9 0.018
20 37 0.074
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

Construct p-chart

Conclusion:

Test Results for P Chart of NUMBER OF DEFECTIVES

TEST 1. One point more than 2.00 standard deviations from center line.
Test Failed at points:  2, 6, 7, 10, 11, 13, 18, 19, 20

The process was below the lower control limits for sample 2, 6, 7, 18, 19. Although this could be
perceived as a “good” result since it means there were very few defects, it might also suggest that
something was wrong with the inspection process during that week that should be checked out. If
there is no problem with the inspection process, then management would want to know what
caused the quality of the process to improve. Perhaps “better” chair material from a new supplier
that week or a different operator was working. The process was above the upper limit during day
10, 11, 13, 20. This suggests that the process may not be in control and the cause should be
investigated. The cause could be defective or maladjusted machinery, a problem with an operator,
defective materials, or a number of other correctable problems. In fact, there is a fluctuating trend
in the number of defectives throughout the 20-day test period. The process was consistently
moving toward an out-of-control situation. This trend represents a pattern in the observations,
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

which suggests a nonrandom cause. If this was the actual control chart used to monitor the process
(and not the initial chart), it is likely this pattern would have indicated an out-of-control situation
before day 19, which would have alerted the operator to make corrections.

Question 3:

Number of errors = 259

Number of samples = 20

z=3

Day Late Deliveries Day Late Deliveries

1 9 11 13
2 18 12 14
3 10 13 12
4 7 14 14
5 20 15 18
6 6 16 10
7 14 17 15
8 17 18 13
9 10 19 10
10 8 20 21

Process average:

total number oferrors 259

ć= = =12.95
number of days 20
Upper control limit

UCL= ć+ z∗σ c = ć+ z∗√ ć=12.95+3∗√12.95=23.7 5

Lower control limit:

LCL=ć−z∗σ c =ć −z∗√ ć=12.95+3∗√ 12.95=2.1 5

Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

In conclusion, it can be witnessed that the process is in control as number of errors stay within
the control limit. The company should continue to follow this quality control strategy to ensure the
stability in quality management.

Question 4:

X CHART
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

Process average : x́ =
∑ x́ =3 . 88 minutes
n

Ŕ=
∑ R =4.11 minutes
n
Using the value of A2=0.58 for n = 5 from Table 3.1 and Ŕ=3.59 4 , we compute the control limits
as:

UCL= x́ + A 2 Ŕ=3.8+ ( 0.58 )( 3. 59 )=6.252

LCL= x́− A2 Ŕ=3.8−( 0.58 ) ( 3.59 )=1. 508

RANGE (R-) CHART

We have, from Table 3.1 for n = 5, D 3=0∧D 4 =2.11 . Thus , thecontrol limits are:

UCL=D 4 Ŕ=2.11 ( 3. 59 4 )=8.696

LCL=D3 Ŕ=0 ( 3. 59 4 ) =0

TEST 6. 4 out of 5 points more than 1 standard deviation from center line (on one side of CL).
Test Failed at points:  5, 7
Quality Management Nguyen Thuy Hanh Duyen| IELSIU18242

Conclusion:

These control limits define the x́ -chart shown in the following figure. It indicates that the process
appears to be in control; any variability observed is the result of natural random occurrences.

These limits define the R-chart shown in the following figure. It indicates that the process appears
to be in control; any variability observed is the result of natural random occurrences.

Overall, it indicates that the process appears to be in control, however, the process average appears
to be 3.796 minutes, whereas the bank’s objective is an average customer’s waiting and service of
approximately 3 minutes, a slightly significant difference of 0.796 minutes. Clearly the previous
problem of long service has been reduced significantly. However, it still can be improved by
reviewing the bank’s intercom system again to improve the service & boost the efficiency. On the
other hands, we can improve the situation by encouraging the drive-through window teller’s
concentration to yield better and accurate witness of customers having unusual long transaction.