Performance Measures Flashcards
What is a Balanced Scorecard?
Includes the following perspectives: Financial - profitability measures Customer - customer satisfaction Internal Business - production cycle Learning and Growth - employee satisfaction
What does a Balanced Scorecard include?
Strategic objectives - statement of firm’s goals and what is needed to achieve them
Performance measures - quantitative methods used to determine if objectives are reached
Baseline performance - how well firm is doing under each performance measure
Targets - amount of improvement for each performance measure
Strategic initiatives - specific changes the firm will undertake to achieve objectives
What is the Pereto Principle?
80% of quality problems result from only 20% of possible causes
What is Six-Sigma Quality?
Statistical measure of percentage of products that are in acceptable form
What is Theory of Constraints?
If demands > capacity = bottleneck resource
If capacity > demands = non-bottleneck resource
What are the four stages at which costs can be addressed?
Prevention
Appraisal or Detection
Internal Failure
External Failure
What are examples of prevention costs?
Using high quality materials Inspecting production process Focusing on engineering and design Providing training to employees Quality circles Maintenance of equipment
What are examples of appraisal or detection costs?
Inspecting samples of materials
Obtaining information from customers
Statistical quality control procedures
What are examples of internal failure costs?
Disposing of scrap
Reworking units
Re-inspecting and retesting
What are examples of external failure costs?
Warranty costs Customer complaints Product liability costs Product returns Marketing to maintain or improve image Loss of future sales
What are conformance costs?
Prevention + Appraisal or Detection costs
What are nonconformance costs?
Internal + External Failure costs
What is the life cycle of business process management?
- Design
- Modeling
- Execution
- Monitoring
- Optimization
What is scanning?
A study of all segments in the general environment to predict the effects of the general environment on the firm’s industry
What is monitoring?
A study of environmental changes identified by scanning to spot important trends
