Question 1

What types of public recognition are given to companies that demonstrate the highest probability that they are consistent producers of high quality goods or services?

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Question 2

Hyundai Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J. D. Power Initial Car Quality survey. With $6.6 billion in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company's firstever loss, Hyundai's new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company. The challenge for Chung was to get his managers to put quality, not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors-a tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant chief to paint all bolts and screws black and ordered workers not to release any car unless all was orderly under the hood. He then publicly declared that Hyundai would produce higher quality cars than Toyota, and that its cars would lead the industry in quality. Today, each workweek starts with a demanding three-hour meeting attended by managers, engineers, designers, and suppliers. In his large boardroom, Chung displays Hyundai cars on rotating turntables or mechanical lifts, whatever is required for those in attendance to see up close what problems need to be fixed. Hyundai managers now measure everything. Hundreds of charts on the walls of every Hyundai factory measure the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts. The quality department at Hyundai has grown from 100 to 1,000 people, all of whom now report directly to CEO Chung. All employees share their ideas about how to improve quality because Chung communicated to workers that their ideas were important and welcomed. To prove it, he rewarded them with bonuses averaging $150 per employee. At one Hyundai factory, workers have suggested 25,000 ideas for improving quality, 30 percent of which have been implemented in the factory. For instance, a worker noticed that the Hyundai Sonata and XG350 (now sold as the Azera) had identically sized spare tires but different-sized spare tire covers. Though it sounds trivial, using the same spare tire cover for both cars saves Hyundai $100,000 a year. Hyundai addresses customer complaints as quickly as possible, and these quick responses have had dramatic results. For example, Hyundai Santa Fe's score in J.D. Power's Initial Car Quality survey dropped from 149 problems per 100 cars (PP100) to 93 PP100 in just one year. Finally, if the greatly improved quality isn't enough to convince you to buy a Hyundai, the company believes that its 10-year/100,000 mile warranty may be enough. The longest, most comprehensive warranty in the auto industry shows the confidence the company has in its cars. And those extensive warranties probably won't cost Hyundai much either, as the improved quality of its cars has cut the cost of warranty repairs, which are paid for by headquarters, by 35 percent over the last three years. -Refer to Hyundai. Hyundai's generous warranty means that the company will assume responsibility for the cost of _al_l_repair_s_fo_r₁₀_year_s_o_r_unti_l_th_e_ca_r_ha_s_bee_n_drive_n_a_n_astoundin_g_100,00₀_miles_,_generall_y_longe_r_tha_n_a_single Driver will own the car. The warranty demonstrates Hyundai's commitment to Characteristic.

Accepted Answer

The warranty demonstrates Hyundai's commitment to assurance, which means providing customers with confidence in their purchase by offering guarantees or promises.

Question 3

RIP
In recent years, Japanese companies such as Mitsubishi, NEC, Fujitsu, and Sony began turning to Americans to manufacture Japanese products. While Sony, Panasonic, and other Japanese giants still excel at cranking out high- quality consumer electronics products such as camcorders and TVs by the millions, it's a different story in industries with short product cycles, which require factories that must build what customers order instead of churning out products in anticipation of demand. Japan's great strength, repetitive manufacturing, is becoming its greatest weakness. This production-on-demand form of management cannot depend on JIT. Instead the American companies rely on raw-in-process inventory, or RIP. RIP calls for keeping a reasonable quantity of varied raw materials or components on hand to meet changing customer demand.
-Refer to RIP. Which of the following statements about the American companies who are taking over Japanese operations is true?

Accepted Answer

The passage states that American companies rely on raw-in-process inventory (RIP), which calls for keeping a reasonable quantity of varied raw materials or components on hand to meet changing customer demand. This implies that the American companies have higher holding costs compared to the Japanese companies who rely on JIT. None of the other statements mentioned about the American companies are true.

Question 4

Define the two common measures of productivity used by managers. Specify the circumstances under which each should be used.

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Question 5

Briefly identify the three different methods of inventory management. Specify the circumstances under which each should be used.

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Question 6

Briefly describe total quality management (TQM).

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Question 7

Hyundai
Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J. D. Power Initial Car Quality survey. With $6.6 billion in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company's first­ever loss, Hyundai's new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.
The challenge for Chung was to get his managers to put quality, not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors-a tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant chief to paint all bolts and screws black and ordered workers not to release any car unless all was orderly under the hood. He then publicly declared that Hyundai would produce higher quality cars than Toyota, and that its cars would lead the industry in quality.
Today, each workweek starts with a demanding three-hour meeting attended by managers, engineers, designers, and suppliers. In his large boardroom, Chung displays Hyundai cars on rotating turntables or mechanical lifts, whatever is required for those in attendance to see up close what problems need to be fixed. Hyundai managers now measure everything. Hundreds of charts on the walls of every Hyundai factory measure the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts. The quality department at Hyundai has grown from 100 to 1,000 people, all of whom now report directly to CEO Chung.
All employees share their ideas about how to improve quality because Chung communicated to workers that their ideas were important and welcomed. To prove it, he rewarded them with bonuses averaging $150 per employee. At one Hyundai factory, workers have suggested 25,000 ideas for improving quality, 30 percent of which have been implemented in the factory. For instance, a worker noticed that the Hyundai Sonata and XG350 (now sold as the Azera) had identically sized spare tires but different-sized spare tire covers. Though it sounds trivial, using the same spare tire cover for both cars saves Hyundai $100,000 a year.
Hyundai addresses customer complaints as quickly as possible, and these quick responses have had dramatic results. For example, Hyundai Santa Fe's score in J.D. Power's Initial Car Quality survey dropped from 149 problems per 100 cars (PP100) to 93 PP100 in just one year.
Finally, if the greatly improved quality isn't enough to convince you to buy a Hyundai, the company believes that its
10-year/100,000 mile warranty may be enough. The longest, most comprehensive warranty in the auto industry shows the confidence the company has in its cars. And those extensive warranties probably won't cost Hyundai much either, as the improved quality of its cars has cut the cost of warranty repairs, which are paid for by headquarters, by 35 percent over the last three years.
-Refer to Hyundai. By addressing customer complaints as quickly as possible, even in the middle of a model year, Hyundai is demonstrating .

Accepted Answer

By addressing customer complaints quickly, Hyundai is showing responsiveness to its customers' needs and concerns. This helps to build trust and confidence in the brand, and can lead to increased customer loyalty and positive word-of-mouth advertising.

Question 8

Hyundai
Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J. D. Power Initial Car Quality survey. With $6.6 billion in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company's first­ever loss, Hyundai's new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.
The challenge for Chung was to get his managers to put quality, not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors-a tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant chief to paint all bolts and screws black and ordered workers not to release any car unless all was orderly under the hood. He then publicly declared that Hyundai would produce higher quality cars than Toyota, and that its cars would lead the industry in quality.
Today, each workweek starts with a demanding three-hour meeting attended by managers, engineers, designers, and suppliers. In his large boardroom, Chung displays Hyundai cars on rotating turntables or mechanical lifts, whatever is required for those in attendance to see up close what problems need to be fixed. Hyundai managers now measure everything. Hundreds of charts on the walls of every Hyundai factory measure the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts. The quality department at Hyundai has grown from 100 to 1,000 people, all of whom now report directly to CEO Chung.
All employees share their ideas about how to improve quality because Chung communicated to workers that their ideas were important and welcomed. To prove it, he rewarded them with bonuses averaging $150 per employee. At one Hyundai factory, workers have suggested 25,000 ideas for improving quality, 30 percent of which have been implemented in the factory. For instance, a worker noticed that the Hyundai Sonata and XG350 (now sold as the Azera) had identically sized spare tires but different-sized spare tire covers. Though it sounds trivial, using the same spare tire cover for both cars saves Hyundai $100,000 a year.
Hyundai addresses customer complaints as quickly as possible, and these quick responses have had dramatic results. For example, Hyundai Santa Fe's score in J.D. Power's Initial Car Quality survey dropped from 149 problems per 100 cars (PP100) to 93 PP100 in just one year.
Finally, if the greatly improved quality isn't enough to convince you to buy a Hyundai, the company believes that its
10-year/100,000 mile warranty may be enough. The longest, most comprehensive warranty in the auto industry shows the confidence the company has in its cars. And those extensive warranties probably won't cost Hyundai much either, as the improved quality of its cars has cut the cost of warranty repairs, which are paid for by headquarters, by 35 percent over the last three years.
-Refer to Hyundai. When Chung Mong Koo, Hyundai's new chairman and CEO visited a Hyundai plant he strode onto the factory floor and demanded a peek under the hood of a Sonata sedan. He didn't like it when he saw loose wires, tangled hoses, and bolts painted four different colors. The fact that this car was not being built the way it was designed and the fact that its manufacturing flaws resulted in it not working as it was supposed to indicated that Hyundai had a problem with .

Accepted Answer

The manufacturing flaws described in the passage indicate a problem with reliability, as the car was not being built the way it was designed and was not working as it was supposed to.

Question 9

List and describe the four kinds of inventory that a manufacturer stores.

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Question 10

Briefly explain how production and productivity relate to the financial success of companies as well as the countries in which the companies are located. Given the nature of today's global economy, comment on how these relationships might be particularly important in developing (as opposed to industrialized) countries, where the industrial base and standard of living are low.

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Question 11

Hyundai
Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J. D. Power Initial Car Quality survey. With $6.6 billion in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company's first­ever loss, Hyundai's new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.
The challenge for Chung was to get his managers to put quality, not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors-a tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant chief to paint all bolts and screws black and ordered workers not to release any car unless all was orderly under the hood. He then publicly declared that Hyundai would produce higher quality cars than Toyota, and that its cars would lead the industry in quality.
Today, each workweek starts with a demanding three-hour meeting attended by managers, engineers, designers, and suppliers. In his large boardroom, Chung displays Hyundai cars on rotating turntables or mechanical lifts, whatever is required for those in attendance to see up close what problems need to be fixed. Hyundai managers now measure everything. Hundreds of charts on the walls of every Hyundai factory measure the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts. The quality department at Hyundai has grown from 100 to 1,000 people, all of whom now report directly to CEO Chung.
All employees share their ideas about how to improve quality because Chung communicated to workers that their ideas were important and welcomed. To prove it, he rewarded them with bonuses averaging $150 per employee. At one Hyundai factory, workers have suggested 25,000 ideas for improving quality, 30 percent of which have been implemented in the factory. For instance, a worker noticed that the Hyundai Sonata and XG350 (now sold as the Azera) had identically sized spare tires but different-sized spare tire covers. Though it sounds trivial, using the same spare tire cover for both cars saves Hyundai $100,000 a year.
Hyundai addresses customer complaints as quickly as possible, and these quick responses have had dramatic results. For example, Hyundai Santa Fe's score in J.D. Power's Initial Car Quality survey dropped from 149 problems per 100 cars (PP100) to 93 PP100 in just one year.
Finally, if the greatly improved quality isn't enough to convince you to buy a Hyundai, the company believes that its
10-year/100,000 mile warranty may be enough. The longest, most comprehensive warranty in the auto industry shows the confidence the company has in its cars. And those extensive warranties probably won't cost Hyundai much either, as the improved quality of its cars has cut the cost of warranty repairs, which are paid for by headquarters, by 35 percent over the last three years.
-Refer to Hyundai. A worker noticed that the Hyundai Sonata and XG 350 sedans had identically sized spare tires but different sized spare tire covers. Using the same spare tire cover for both cars saves Hyundai $100,000 a year and increased the company's productivity by .

Accepted Answer

By using the same spare tire cover for both cars, Hyundai is getting the same output (i.e., spare tire covers) for fewer inputs (i.e., not having to produce and inventory two different sized covers). This increases the company's productivity and saves them $100,000 a year. Therefore, the correct answer is B) getting the same output for fewer inputs.

Question 12

RIP
In recent years, Japanese companies such as Mitsubishi, NEC, Fujitsu, and Sony began turning to Americans to manufacture Japanese products. While Sony, Panasonic, and other Japanese giants still excel at cranking out high- quality consumer electronics products such as camcorders and TVs by the millions, it's a different story in industries with short product cycles, which require factories that must build what customers order instead of churning out products in anticipation of demand. Japan's great strength, repetitive manufacturing, is becoming its greatest weakness. This production-on-demand form of management cannot depend on JIT. Instead the American companies rely on raw-in-process inventory, or RIP. RIP calls for keeping a reasonable quantity of varied raw materials or components on hand to meet changing customer demand.
-Refer to RIP. The JIT system preferred by Japanese manufacturers .

Accepted Answer

JIT (Just-In-Time) system preferred by Japanese manufacturers makes component parts available at the manufacturing plant just as they are needed. On the other hand, RIP (Raw-In-Process Inventory) keeps a reasonable quantity of varied raw materials or components on hand to meet changing customer demand, which is preferred by American companies for industries with short product cycles. Therefore, B is the best choice as it correctly describes the JIT system preferred by Japanese manufacturers.

Question 13

List and briefly identify the three basic measures of inventory that managers use to keep inventory costs from becoming too large.

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Question 14

Make a list of the characteristics that define quality for goods. Then make a second list of characteristics that define quality for services. Why do these lists differ? Which characteristic appears on both lists and why?

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Question 15

Hyundai
Because of the poor quality of its cars, Hyundai watched its U.S. sales drop from 264,000 cars to 90,000 cars in just two years. Hyundai cars ranked 26th out of 35 car brands in terms of initial car quality as measured by the influential J. D. Power Initial Car Quality survey. With $6.6 billion in debt, a $1 billion investment for a new manufacturing plant in Alabama, and the company's first­ever loss, Hyundai's new chairman, Chung Mong Koo, declared that improving quality was the only way to fix the company.
The challenge for Chung was to get his managers to put quality, not costs, first. So he sent a visible, meaningful message that poor quality would no longer be tolerated. During one plant visit, Chung demanded to see under the hood of a car on the production line. He was furious when he saw loose wires, tangled hoses, bolts painted four different colors-a tremendous deviation from what the engine compartment was supposed to look like. On the spot, he instructed the plant chief to paint all bolts and screws black and ordered workers not to release any car unless all was orderly under the hood. He then publicly declared that Hyundai would produce higher quality cars than Toyota, and that its cars would lead the industry in quality.
Today, each workweek starts with a demanding three-hour meeting attended by managers, engineers, designers, and suppliers. In his large boardroom, Chung displays Hyundai cars on rotating turntables or mechanical lifts, whatever is required for those in attendance to see up close what problems need to be fixed. Hyundai managers now measure everything. Hundreds of charts on the walls of every Hyundai factory measure the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts. The quality department at Hyundai has grown from 100 to 1,000 people, all of whom now report directly to CEO Chung.
All employees share their ideas about how to improve quality because Chung communicated to workers that their ideas were important and welcomed. To prove it, he rewarded them with bonuses averaging $150 per employee. At one Hyundai factory, workers have suggested 25,000 ideas for improving quality, 30 percent of which have been implemented in the factory. For instance, a worker noticed that the Hyundai Sonata and XG350 (now sold as the Azera) had identically sized spare tires but different-sized spare tire covers. Though it sounds trivial, using the same spare tire cover for both cars saves Hyundai $100,000 a year.
Hyundai addresses customer complaints as quickly as possible, and these quick responses have had dramatic results. For example, Hyundai Santa Fe's score in J.D. Power's Initial Car Quality survey dropped from 149 problems per 100 cars (PP100) to 93 PP100 in just one year.
Finally, if the greatly improved quality isn't enough to convince you to buy a Hyundai, the company believes that its
10-year/100,000 mile warranty may be enough. The longest, most comprehensive warranty in the auto industry shows the confidence the company has in its cars. And those extensive warranties probably won't cost Hyundai much either, as the improved quality of its cars has cut the cost of warranty repairs, which are paid for by headquarters, by 35 percent over the last three years.
-Refer to Hyundai. In every Hyundai factory, hundreds of wall charts track the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts. The company is maintaining quality by measuring .

Accepted Answer

The passage states that "Hundreds of charts on the walls of every Hyundai factory measure the number of times and the degree to which a process has produced parts that differ meaningfully from the quality standards for those parts." This indicates that Hyundai is measuring the variation in the production process to maintain quality.

Question 16

There are two ways to define quality. Describe both of them.

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Question 17

Briefly explain the difference between ISO 9000 certification and the Baldrige National Quality Award.

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Question 18

Manufacturing processes are classified according to the amount of processing or assembly that occurs after receiving an order from customers. Briefly describe the three types of manufacturing processes.

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Question 19

What is quality? List and define three characteristics of quality for goods and for services. Explain why these characteristics are different for goods and services. Then identify the one dimension that is common in both lists. Finally, specify a good or service that you were very dissatisfied with during the past year, and explain which of these quality dimensions the good or service was deficient on.

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Question 20

Define productivity. Provide an everyday example of a measure of productivity that consumers sometimes use in deciding which car to purchase.

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Quiz 18: Managing Service and Manufacturing Operations