4.4 Making operational decisions to improve performace: improving quality

Question 1

Benefits of good quality to a business

Answer 1

• Provides a USP: reason for consumers to purchase
• Charge higher prices: increasing profit margins
• Increase its sales
• Enhance reputation

Question 2

Methods of improving quality

Answer 2

• Quality assurance
• Total Quality Management
• Kaizen

Question 3

Quality assurance

Answer 3

System for ensuring the desired level of quality in the development, production and delivery of products or services.

Question 4

Total Quality Management

Answer 4

Where there is a culture of quality throughout the organisation.

Question 5

Kaizen

Answer 5

Japanese business philosophy of continuous improvement where employees are encouraged to identify and suggest possible improvements in the production process.

Question 6

Benefits of improving quality

Answer 6

• Enhanced reputation
• Increased brand loyalty
• Competitive advantage (USP)
• Increased revenue due to higher sales + (maybe) higher selling price
• Greater flexibility in terms of price

Question 7

Difficulties of improving quality

Answer 7

• Costs of training staff, administration of the system
• Employees can be resistant to change
• Once employees are convinced, they may demand higher pay

Question 8

Consequences of poor quality

Answer 8

• Cost of scrapping/ reworking products\
• Additional costs if goods are returned for repair/ replacement under warranty
• Costs resulting from the damage to the business’s reputation