Quality and inventory management | Operations Management homework help

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The CEO sends you, the operations manager, a memo that customer complaints are up the past couple of months, and her directions are, “check into where quality is breaking down and tell me how we can fix it.”

You start your investigation by speaking to customer services, and they say customers are complaining that stitching is unraveling around the sleeves and bottoms of “The Beast”, your company’s top of the line athletic t-shirt marketed to high schools and colleges for their men’s and women’s competitive sports teams. The chief of customer service tells you, “these t-shirts are worn every day in practice and they go through a lot of washings…the teams are really rough on them.” He provides you with the specific orders and production lot #s for the majority of the defects. You ask to see samples of defective t-shirts returned by customers and you notice the thread weight is way too light for “The Beast”. The thread in the defects is used on low-end casual t-shirts, and would not withstand the harsh abuse of competitive sports teams.

As you delve into the production lot #s provided, you find most of the defective shirts are being stitched on the grave yard shift (10pm – 6am). Then you remember back to the days when you were production manager on the grave yard shift and start asking yourself, “what processes could be breaking down on that shift to cause the problem?” Then it comes to you; swing shift (2 – 10pm) is responsible for positioning precut t-shirt fabric and bulk thread for sewing on the grave yard shift because “grave yards” only has one forklift operator and “swings” has three, so the fabric and bulk thread required by grave yards has to be in place when swings leaves.

You talk to the grave yard shift production supervisor, and he says, “most of the time swings prepositions enough fabric and bulk thread for our production run that night, but occasionally they short us fabric or bulk thread so I have my forklift driver get some from stock.” Your gut sinks because you know the fork lift driver probably does not know “The Beast” shirt requires the heaviest thread in the warehouse.

Are you starting to “put two and two together”? Yes, the forklift driver was pulling the wrong thread from the warehouse, and since he was doing this toward the end of the shift it was not being caught by the sewing machine operator. As a result, the wrong thread was being used to stitch some of the shirts. In the assignments below, students get the opportunity to explore quality issues in organizations, conduct analysis of data to determine if quality is being compromised, and then formulate recommendations to improve quality in a process.

Unit Learning Outcomes

Formulate a plan to manage quality in an organization’s products and services, and incorporate quality improvement. (CLO 2, 3, 4, 5, 6 and 7)
Prepare a Pareto diagram for evaluating quality improvement measures into an organization. (CLO 1, 3, 4, 5, and 6)
Identify whether quality management metrics are adequate to ensure organizational goals are met. (CLO 1, 4 and 7)
Develop a data collection plan that will permit the appropriate application of statistical process control (SPC) to investigate inefficiencies and or ineffective processes. (CLO 3 and 4)
Calculate critical inventory management metrics such as economic order quantity and economic production quantity. (CLO 2, 4, and 5)

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July 1, 2023

1. a) Explain how the four uses of Output help us to
determine the GDP.

b) Calculate the GDP using only those numbers that
may be relevant from the following numbers

Consumption $60B

Government purchases $10B

Taxes $15B

Private Sector Gross
Investment $10B

Savings $10B

Imports $6B

Exports $8B

c) Explain
why Real GDP is more relevant for comparing the trends in GDP than a Nominal
GDP?

2. a) Describe using examples the three types of unemployment
we generally come across and which of these are included in the definition of
natural unemployment.

b) Is there a relationship between potential GDP and
Natural unemployment rate? Explain.

c) The unemployment rate in November 2011 came down
to 8.6% from 9.0% in the previous month. What could be a possible reason for
the decrease in the unemployment rate even when many new jobs were not being
created in the economy at that time?

3. a) What are the factors that contribute to the
growth in the economy?

b) How can we attain a faster growth rate in the
economy in the future?

c) The size of the Chinese economy currently is
about half the size of the US economy. But if the Chinese economy continues to
grow at 10% annually while the US economy grows at 3% (our historic average
growth over past many years!), using the Rule of 70 what can we say about the
two economies in the future?

4. a) Show graphically how the AS and AD graphs help to
determine the equilibrium in the economy.

b) Explain using the AS-AD graphs how an increase in
government expenditure will change the equilibrium in the economy. Do it in two
stages. First show how the graph changes with the initial increase in government
expenditure and then what happens after the multiplier process works through
the economy.

c) What is likely to be the effect of such increase
in consumption expenditure on the budget balance for the government?

5. a) What are the three functions money should be able
to perform and how is such money currently created in our economy?

b) Explain the various ways the Federal Reserve can
change the money supply in the economy?

c) If the Federal Reserve is following a restrictive
monetary policy by lowering the money supply in the economy, what will be its
effect on the equilibrium outcome in the economy? Explain using AS-AD analysis.