1.

) Product quality control (sometimes called acceptance control) relates to inputs or outputs of the system; used when quality is evaluated with respect to a batch of existing products or services.

Product

quality control lends itself to acceptance sampling procedures, in which some portion of a batch of outgoing items (or incoming materials) is inspected to ensure that the batch meets specifications with regard to the percentage of defective units that will be tolerated in the batch.

2.) Process quality control concerns monitoring quality while the product or service is being produced.

Under process control, periodic samples are

taken from a process and compared to a predetermined standard.

Process control relates to the control of the

equipment and processes used during the production process.

Under process control, periodic samples are

taken from a process and compared to a predetermined standard. If the sample results are acceptable, the process is allowed to continue. If the sample results are not acceptable, the process is halted and adjustments are made to bring the machines or processes back under control.

Acceptance sampling - is a method of predicting the quality of a batch or a large group of products from an inspection of a sample or group of samples taken from the batch. Acceptance sampling is used for one of three basic reasons:

1. The potential losses or costs of passing

defective items are not great relative to the cost of inspection; for example it would not be appropriate to inspect every match produced by a match factory.

2) Inspection of some items requires

destruction of the product being tested, as is the case when testing prepared food items.

3) Sampling usually produces results more

rapidly than does a census.

If more than a certain number (determined

statistically) are found to be defective, the entire batch is rejected, as it is deemed to have an unacceptably large percentage of defective items.

Because of the possibility of making an

incorrect inference concerning the batch, acceptance sampling always involves risks:

a) Producers risks the risk the producer is

willing to take of rejecting the good batch.

b) Consumers risks the risk of accepting a

bad batch.

 The only method of simultaneously

lowering both of these risks is to increase the sample size, which also increase the inspection costs.

Inventories

quantity of raw materials, in-process goods, or finished good on hand;

- serves as a buffer between different rates of flow associated with the operating system.

 Raw material inventories serve as a buffer

between purchasing and production.

In-process inventories are used to buffer

differences in the rates of flow through the various production processes.

Finished-goods inventories act as a buffer

between the final stage of production and shipping.

 Inventories add flexibility to the operating

system and allow the organization to do the following: 1.) Purchase, produce, and ship in economic lot sizes rather than in small jobs. 2.) Produce on a smooth, continuous basis even if the demand for the finished product or raw material fluctuates. 3.) Prevent major problems when forecasts of demand are in error or when unforeseen slowdowns or stoppages in supply or production occur.

Just-in-Time Inventory Control (JIT) was pioneered in Japan but has become popular in the United States. - Sometimes referred to as zero inventory systems, stockless systems, or kanban systems. JIT is a philosophy for production to ensure that the right items arrive and leave as they are needed.

- Under JIT, organizations make smaller and more frequent orders of raw materials. - It is also called a demand pull system because items are produced or ordered only when they are needed by the next stage in the production process.

Benefits of JIT System

1) Inventory levels are drastically lowered. 2) The time it takes products to go through

the production facility is greatly reduced. This enables the organization to be more flexible and more responsive to changing customer demands.
the cost of scrap is reduced because defective parts and services are discovered earlier.

3) Product/service quality is improved and

4) With smaller product batches, less space

is occupied by inventory and materialshandling equipment. This also allows employees to work closer together, which improves communication and teamwork.

In other words, by examining and solving

customers problems by supplying them with exactly what they need, the company not only improves its quality but also builds ties to its customer base.

Tracking Inventory
A.) Bar-Code Technology

- Changed the way business track inventory

- Bar coding has reduced errors in tracking inventory - Computer program recognizes the information contained in the bar code and automatically adds or subtracts the item from inventory.

B.) Physical Inventory - Involves counting the number of units of inventory a company holds in stock.

- Managers need to conduct physical inventories because actual inventory is often different from the level of inventory tracked.

Safety Stocks inventory maintained to accommodate unexpected changes in demand and supply and allow for variations in delivery time.

The optimal size of the safety stock is

determined by the relative costs of an outof-stock item versus the costs of carrying the additional inventory.