4.3 - achieving quality production

Question 1

quality

Answer 1

to produce a good or service which meet customer’s expectation

Question 2

good quality

Answer 2

• establishes a brand image
• build brand loyalty
• increase sales
• maintain good reputation
• attract new customers

Question 3

poor quality

Answer 3

• lose customers to others
• have to replace faulty products and repeating poor service (increases costs)
• have bad reputation
• low sales and profits

Question 4

quality control

Answer 4

checking for quality at the end of production process

Question 5

quality control advantages

Answer 5

• eliminates fault / defect before customer receive it
• not much training required for conducting quality check

Question 6

quality control disadvantages

Answer 6

• higher costs
• expensive to hire employees
• quality control may find faults but not find out why it occurs, difficult to find solution to problem
• if product has to be replaced, its expensive for firm

Question 7

quality assurance

Answer 7

checking for quality throughout production process

Question 8

quality assurance advantages

Answer 8

• eliminates fault / defect before customer receives it
• since each stage of production is checked, fault is easier to identify
• products dont have to scraped or reworked as often = less expensive

Question 9

quality assurance disadvantages

Answer 9

• expensive to carry out
• dependant on how well employee will follow quality standards
• could demotivate staff due to lack of trust

Question 10

total quality management

Answer 10

• the continuous improvement of products and production process by focusing
  on quality at every stage of production

Question 11

total quality management advantages

Answer 11

• quality is built into every part of the production process and becomes central to worker’s principles
• eliminates all fault before product gets to customer
• no customer complaints (lessercosts, lesser returns) = brand images
• waste is removed (betternefficiency)

Question 12

total quality management disadvantages

Answer 12

• expensive to hire and train all employees
• relies on employees
• may not be motivated to follow all procedures

Question 13

economies of scale

Answer 13

benefits enjoyed by the firm as it expands its scale of production
leading to decreased average cost

Question 14

internal economies of scale : financial economie

Answer 14

-more banks prefers to give loan to large firms since they are more stable

• large firms able to raise capital more cheaply than small firms

Question 15

internal economies of scale : purchasing economie

Answer 15

benefits enjoyed by large firms when they buy supplies in bulk
e.g trade discounts

Question 16

internal economies of scale : managerial economie

Answer 16

large firm able to pay for specialized managers
e.g marketing, production managers

Question 17

internal economies of scale : risk bearing economie

Answer 17

large firms can spread out their risks producing or establishing different branches

Question 18

internal economies of scale : technical economie

Answer 18

able to afford modern technology and equipment
= leads to improvement and efficiency

Question 19

internal economies of scale : marketing economie

Answer 19

enjoying marketing benefits
e.g advertising, marketing research, purchasing of own vehicle for distribution of product

Question 20

diseconomies of scales

Answer 20

problem faced by the firm as it expands beyond a particular
size and leads to an increase in average cost in productions

Question 21

external economies of scales

Answer 21

benefits enjoyed by firm as whole industry expands

Question 22

external economies of scales : development of specialist firms

Answer 22

provide essential services for whole industry at a lower cost
= leading to a decrease in average cost
e.g banking firms, insurance, transport, security firms

Question 23

external economies of scales : a pool of skilled labour

Answer 23

workers will be attracted to expanded firms, all firms in
industry will be able to employ skilled workers at a lower cost

Question 24

external economies of scales : improved infrastructure

Answer 24

improvement in roads, water, electricity
= enables firm to produce at lower cost

Question 25

external economies of scales : training and development

Answer 25

firms will benefit by training their workers and employing qualified employee from such insititutions