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It is an exclusive e-Learning Blog that has been dedicated to help keen learn students to boost their knowledge in different subjects.

Determinants of Quality

There are following five (5) Determinants of Quality Service:
1. Tangibles
2. Reliability
3. Responsiveness
4. Assurance
5. Empathy

1. Tangibles:

The physical assets an agency utilizes positions the agency against their competitors.

According to Business Dictionary: Having physical existence and/or form, or discernible through one or more senses.

2. Reliability:

A customer service business is only as good as the quality of service they provide.

Or, Ability to perform the promised service dependably and accurately.


3. Responsiveness:

Willingness to help customers and provide prompt service. For example: How well is a telephone operator able to respond to a customer’s questions?

4. Assurance

Knowledge and courtesy of employees and their ability to convey trust and confidence. The amount of confidence a customer service company installs in the client.

5. Empathy:

Caring, individualized attention the firm provides its customers.Customer service companies must work to understand their clients business and the goals of their contact.

Total Quality Management (TQM)

Total Quality Management (TQM) may be defined as managing the entire organization so that it excels on all dimensions of products and services that are important to the customer.

Simply, Commitment to quality throughout organization.

Principles of TQM:

* Customer-oriented
* Leadership
* Strategic planning
* Employee responsibility
* Continuous improvement
* Cooperation
* Statistical methods
* Training and education

Costs of Quality

Costs of Quality does not mean the use of expensive or very highly quality materials to manufacture a product. The term refers to the costs that are incurred to prevent, detect and remove defects from products.

Quality costs are categorized into four (4) main types. Theses are:

1. Appraisal Costs: Appraisal Costs are the costs associated with measuring, evaluating or auditing products or services to assure conformance to quality standards and performance requirements.

These include the costs of incoming and source inspection/test of purchased material; in process and final inspection/ test; product, process, or service audits; calibration of measuring and test equipment; and the costs of associated supplies and materials.

2. Prevention Costs: The costs of all activities specifically designed to prevent poor quality in products or services.

Example:
- improvement of manufacturing processes
- workers training
- quality engineering
- statistical process control

3. Internal Failure Costs: Internal failure costs are those costs that are incurred to remove defects from the products before shipping them to customers.

Example:
- Scrap
- Rework
- Re-inspection
- Re-testing
- Material review
- Downgrading

4. External Failure Costs: External failure costs occurring after delivery or shipment of the product, and during or after furnishing of a service, to the customer.

Example:
- processing customer complaints
- customer returns
- warranty claims
- product recalls

Please visit, to read: Quality Management | Part - A
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It is an exclusive e-Learning Blog that has been dedicated to help keen learn students to boost their knowledge in different subjects.

Quality Management (Part - A)

Quality:

The quality of a product or service is a consumer’s perception of the degree to which the product or service meets his or her expectations.

Simply, Quality is the ability of your product or service to satisfy your customers.

According to American Society for Quality:

The totality of features and characteristics of a product or service that bears on its ability to satisfy stated or implied needs.

According to Business Dictionary:

Product Quality is the group of features and characteristics of a saleable good which determine its desirability and which can be controlled by a manufacturer to meet certain basic requirements. Most businesses that produce goods for sale have a product quality or assurance department that monitors outgoing products for consumer acceptability.

Dimensions of Product Quality:

In 1987 David Garvin suggested that there are eight dimensions to quality. Let’s briefly look at each of Garvin's eight dimensions.

1. Performance
2. Features
3. Reliability
5. Conformance
5. Serviceability
6. Durability
7. Aesthetics
8. Perceived Quality


1. Performance:

A quality product will perform as expected by the user and as specified by the manufacturer. Performance is often a source of contention between customers and suppliers, particularly when deliverables are not adequately defined within specifications.

Simply, how well the product or service performs the customer’s intended use.

Example:
                     i) The speed of a laser printer;
                     ii) Vehicle - Horsepower; and
                     ii) Service - Processing customer requests.

2. Features:

These are characteristics that are supplemental to the basic operating characteristics.

Simply, the special characteristics that appeal to customers.

Example:
                      i) A stereo CD player would be an additional feature; and
                     ii) Automatic selfie system in mobile.

3. Reliability:

Reliability of a product is the degree of dependability and trustworthiness of the benefit of the product for a long period of time. This is a key element for users who need the product to work without fail.
Simply, the likelihood of breakdowns, malfunctions or the need for repairs.
Example:
                     i) Product - Mean time before failure; and
                     ii) Service - Variance in processing time.

4. Conformance:

Conformance is the precision with which the product or service meets the specific standards.

5. Serviceability:

Serviceability is the speed with which the product can be put into service when it breaks down, as well as the competence and the behaviour of the service person.

Example:
                      i) Product – Design; and
                     ii) Service –Accessibility, Online.

6. Durability:

Durability is the length of time or amount of use before needing to be repaired or replaced. The item will be used until it is no longer economical to operate it.

Example:
                      i) Product – Ability to repair; and
                     ii) Service – Keeping pace with industry.

7. Aesthetics:

Aesthetic aspect of a product is comparatively subjective in nature and refers to its impact on the human senses such as how it looks, feels, sounds, tastes and so on, depending upon the type of product. Design is important for many products; the colour picked indicates certain things.

Examples:
                      i) Product - Compared to others; and
                     ii) Service - Appearance of location.

8. Perceived Quality:

Perceived Quality is the quality attributed to a good or services based on direct measures.

Example:
A high quality product may get the reputation for being low quality based on poor service by installation or field technicians. If the product is not installed or maintained properly, and fails as a result, the failure is often associated with the product’s quality rather than the quality of the service it receives.

Please visit, to read: Quality Management | Part - B
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Problem-02: A survey conducted over the last 20 years in Hamburg., Germany indicated that in 8 of them the winter was mild, in 7 of them it was cold, and in the remaining 5 it was very cold. A company sells 1,000 heavy coats in a mild year., 1,300 in a year, and 2,000 in a very cold year.
                   Find the yearly expected profit of the company if a coat costs 85 deutsche marks (DM) and is sold to stores for 123 DM.

Solution:
According to the question,
* States of nature: (i) Mild, (ii) Cold, (iii) Very cold
* Alternative courses of Action: Selling of heavy coats.
Probabilities of states of natures:
(i) Mild = 8/20 = 0.4
(ii) Cold = 7/20 = 0.35
(iii) Very cold = 5/20 = 0.25

You can also read: Decision Analysis » Problem-01 Solution | Operations Research

Table for the calculation of Expected Value

Probabilities 0.4 0.35 0.25 1
States of Nature Mild Cold Very cold Expected Value
Courses of Action
Selling of heavy coats 1,000 1,300 2,000 1,355

Expected profit of coat = 123 - 85 = 38
∴ Expected total profit = 38 × 1,355 = 51,490

N.B:

How to calculate Expected value:
EV = (1,000 × 0.4) + (1,300 × 0.35) + (2,000 × 0.25) = 1,355
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Problem-01: A marketing agent frequently flies from Montreal to Boston. She can ride the airport bus from her hotel to the airport, which costs $3; but if she takes it, there is a .08 chance that she will miss the flight. A hotel limousine costs $7, with a .96 chance of being on time for the flight. For $15, she can take a taxi that will make 99 of 100 flights. Each time she catches the plane, she will conclude a business transaction that will produce a profit of $1,000; otherwise, she will lose the deal. Which mode of transportation should the marketing agent use in order to maximize her profits?

Solution:
According to given data, we can draw following decision tree:
Figure: Decision Tree, according to given data.

Net Profit Calculation from different mode of transportation:

For Airport Bus :

EMV=$1,000 (.92) + $0 (.08) = $920
Net Profit: $920 - $3 = $917

For Hotel Limousine :

EMV=$1,000 (.96) + $0 (.04) = $960
Net Profit: $960 - $7 = $953

For Taxi :

EMV=$1,000 (.99) + $0 (.01) = $990
Net Profit: $990 - $15 = $975


Figure: Decision Tree for making final decision.
Here, Taxi, represents the highest profit from others. Since, the marketing agent should use a taxi in order to maximize her profits.
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It is an exclusive e-Learning Blog that has been dedicated to help keen learn students to boost their knowledge in different subjects.

Quantitative Methods: Duality in Linear Programming

Associated with every linear programming problem, there is another intimately related LPP, called the dual problem of the original LPP. The original LPP is called the Primal Problem. According to the duality theorem:
“For every maximization (or minimization) problem in linear programming, there is a unique similar problem of minimization (or maximization) involving the same data which describes the original problem.”


The rules for constructing the Dual from the Primal (or Primal from the Dual) are:
i) If the objective of one problem is to be maximized, the objective of the other is to be minimized.
ii) The maximization problem should have all ≤ constraints and the minimization problem has all ≥ constraints.
iii) All primal and dual variables must be non-negative (> 0).
iv) The element of the right hand side of the constraints in one problem are the respective coefficient of the objective functions in the other problem.
v) The matrix of constraints coefficients for one problem is the transpose of the matrix of constraint coefficients for the either problem.
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Formulation of Linear Programming Models

The three basic steps in formulating a linear programming model are as follows:
Step-I: Identify the decision variables to be determined and express them in terms of algebraic symbol.

Step-II: Identify all the limitations or constraints in the given problem and then express them as linear inequalities in terms of above defined decision variables.

Step-III: Identify the objective which is to be optimized and express it as a linear function of the above defined decision variables.

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Quantitative Methods: Linear Programming

Linear programming is a mathematical way of planning, which involves three steps:1. Identify the objective function as a linear function of its variables and state all the limitation on resources as linear equation and/ or inequalities (constraints).
2. Use mathematical techniques to find all possible sets of values of the variables (unknown) satisfying the constraints.
3. Select the particular set of values (obtained in 2) that lead to your objective – maximize profit, least cost etc.

Advantages of L.P:

- Helps in attaining optimum use of production factors.
- Can be used to solve allocation type problem.
- Can go a long in improving skills.
- Give possible and practical solution, subject to other constraints.
- Highlights bottle-hecks in production process.

Limitations of linear problem are:



- L.P models are based on the assumption of perfect divisibility of resources, accordingly the solution variables can have any value, where as some times some of the variables can have only integral value.
- Assumes linear relationship between variables, but many time in practice it is not possible to express both the objective function and the constraints in a linear form.
- Do not take into account effect of time.
- Can be adapted only under the condition of certainty.
- In case of large, complex and constrained problems computation problems are enormous.
- Deals only one single objective, but in real-life situations, there are more than one objective.
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Questions: Briefly describe the application of operations Research in the following functional areas of management, namely finance, marketing personnel and production.

Answer: In the recent years, OR has entered successfully many different areas of research for military, government, service organizations and industry. We shall briefly describe some of the application of OR in the functional areas of management.

FINANCE:
i) Cash flow analysis, long range capital requirements.
ii) Credits policies, Credit risks.
iii) Claim and complaint procedures.


MARKETING:
i) Production selection, timing and competitive actions.
ii) Advertising media with respect to cost and time.
iii) Number of salesmen, frequently of calling of accounts etc.

PERSONNEL:
i) Forecasting the manpower requirement, recruitment policies and assignment of jobs.
ii) Selection of suitable personnel with due consideration for age and skills etc.
iii) Determination of optimum number of persons for each service centre.

PRODUCTION:
i) Scheduling and sequencing the production run by proper allocation of machines.
ii) Calculating the optimal product mix
iii) Selection, location and design of the sites for the production plant.
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Definition: Assignment problems are specials class of linear programming problems which involve determining most efficient assignment of people to projects, jobs to machines etc. The desired objective is to minimize total costs or time required to perform the task at hand. The assignment is made on a one-to-one basis.

Comparison with Transportation Model: Assignment model may be regarded as a special case of transportation model. Here facilities represent the “sources” while the jobs represent the “destinations”. The supply available at each source is 1 i.e. ai = 1 for all i. Similarly, the demand at each destination is 1 i.e. bj = 1 for all j. The cost of transport ting (assigning) facility i to job j is cij.


Distinction between assignment problem and transportation problem: Assignment problem is a variation of transportation problem with two characteristics:
i) The cost matrix of an assignment problem is a square matrix and
ii) The optimum solution for the problem would always be such that there would be only one assignment in a given row or column of the cost matrix.
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The following are the major reasons why MS employs model in general and mathematical models in particular:

a) Models enable the compression of time.

b) Manipulating the model is much easier than manipulating the real system.

c) The cost of making mistakes during a trial-and-error experiment is much smaller when done on the model.

d) The cost of modeling analysis is much lower than if a similar experiment were conducted with the real system.

e) Models enhance and reinforce learning.

f) The use of mathematical models enables quick identification and analysis of a very large number of possible solutions.

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It is an exclusive e-Learning Blog that has been dedicated to help keen learn students to boost their knowledge in different subjects.

A Model Defined

A model is a simplified representation or abstraction of reality. A model can be simple but not represent the true situation.

Models are classified according to their degree of abstraction, into three groups:

Iconic (Scale): An iconic model, the least abstract, is a physical replica of a system, usually based on a different scale than the original. These may appear in three dimensions such as airplane, car or bridge models made to scale or a production line.


Analog: An analog model does not look like the real system but behaves like it. There are usually two-dimension charts or diagrams; i.e. they are physical models, but their shape differs from physical models, but their shape differs from that of the system. Some examples are:
- Organization charts that depict structure, authority and responsibility relationship.
- A map where different colors represent water or mountains.
- Stock market charts.
- Blueprints of a house etc.
Analog models are more abstract than iconic models.

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Mathematical: The complexity of relationships in some system cannot be represented physically, or the physical representation may be cumbersome and take time to construct or manipulate. Therefore, a more abstract model is used with the aid of mathematics. Most MS (or OR) analysis is executed with the aid of mathematical models. They can describe diverse situations and be easily manipulated for purposes of experimentation and prediction.
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