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Quality and Time
Quality refers to a wide variety of factors:
- Fitness for use
- Satisfies needs of customers
- Conforms to design specifications
- Conforms to engineering requirements
Quality and Time
The two basic aspects of quality:
- Quality of design –measures how closely the product characteristics or services performed meet the needs and wants of consumers. Does the design meet the requirements of the consumers?
- Conformance quality–measures the performance of a product or service according to design and production specifications. Does the product meet the design and production specifications?
Quality and Competitiveness Advantage
Speed to market has become one of the key competitive advantages.
Two common measures are:
- 1. Customer response time - the time between the placing of an order and when the customer receives the product
- 2. On-time performance - percentage of times that a product or service was delivered according to or ahead of schedule
The Benefits And Drawbacks of Decentralization
- • Segregate duties
- • Greater responsiveness to local needs
- • Quicker decision making
- • Increased motivation
- • Aids management development and learning
- • Sharpens the focus of
- • Sub optimal decision making (goal incongruence)
- • Duplication of duties
- • Decreased loyalty to the organization as a whole
- • Increased costs of gathering information
How Different Business Units Are Evaluated
- Consider each segment separately.
- Divide costs into fixed and variable; and fixed costs into discretionary and non-controllable or committed.
- Use contribution margin for short-term decisions.
- Use variable and discretionary fixed costs to evaluate management in the short-term.
- Use all costs for evaluating long-term decisions.
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