Managing quality

Question 1

Quality -

Answer 1

• it meets the needs & expectations of the customer.

Question 2

How to judge quality (7)

Answer 2

1. Design (looks, style, features)
2. Functionality (does the job well)
3. Reliability (acceptable level of breakdowns or failure)
4. Consistency (products meet the same quality standards time and time again)
5. Durable (lasts as long as it should)
6. Good after sales service (ease of gaining refunds, guarantees, warranties)
7. Price/value for money (the price reflects the quality of the product)

Question 3

Consequences of quality issues (6)

Answer 3

1. Loss of customers (as customers are dissatisfied with the product and therefore will not return)
2. Reputation of the business goes down (difficult to attract new customers)
3. Costs of recalling, scrapping or re-working/re-making (products that are faulty or not up to the required standard)
4. Costs of replacements or refunds
5. Costs of reducing the price of products that no-one wishes to buy (these products may not generate a profit)
6. Legal action might be taken against the business

Question 4

Consumers are more…(3)

Answer 4

1. Knowledgeable and demanding
2. Prepared to complain about poor quality
3. Able to share information about poor quality

Question 5

Business benefits of greater quality (5)

Answer 5

1. Customer satisfaction
2. Repeat purchase
3. Customer recommendation
4. Lower marketing costs
5. Higher customer loyalty

Question 6

How to measure quality (6)

Answer 6

1. Level of product returns
2. Mystery shoppers
3. Customer loyalty
4. Customer complaints
5. Customer satisfaction rates
6. Failure/reject rates

Question 7

Quality control:

Answer 7

Traditional method of checking quality. All or a sample of products are checked at the end of the production process/after a service has been completed.

Question 8

Quality control benefits (4)

Answer 8

1. Protects the standard of the product
2. Customers, in theory, will not receive a sub-standard product, but depends on whether 100% or a sample of products are checked
3. Specialist trained inspectors are used to check quality, leaving operatives free to complete other tasks
4. Opportunity to receive feedback from customers that have received a service

Question 9

Quality control drawbacks (4)

Answer 9

1. Wasteful approach; products that do not meet the quality control requirements are often scrapped
2. Workers less likely to take responsibility for errors
3. High cost of inspectors
4. Checking of services (questionnaires, happens after the event; the damage of poor quality service may have already been done)

Question 10

Quality assurance:

Answer 10

Quality assurance refers to the processes that ensure quality meets the requirements of customers. Quality assurance aims to achieve quality by organising every process to manufacture the good or provide a service to get it ‘right first time’ to ensure mistakes never happen. Unlike quality control, every member of staff will be responsible for contributing towards quality.

Question 11

Quality assurance benefits (4)

Answer 11

1. Costs reduced (less need for reworking and less wastage; therefore, average unit costs are reduced leading to increased efficiency)
2. Better relationships between employees and management (leading to a possible increase in productivity)
3. Staff motivation (should increase, as directly responsible and involved in the quality process)
4. Consistent levels of quality can result in a competitive advantage (being gained over rivals resulting in increased sales and increased customer loyalty, as customer expectations are continually met)

Question 12

Quality assurance drawbacks (3)

Answer 12

1. Moving to a quality assurance system can be time consuming and staff may resist any change
2. Training costs will be high
3. Reliant on staff understanding of the importance of meeting quality standards & having the motivation to ensure the system works (some may view as a tick box exercise)

Question 13

The importance of quality assurance to a business (6 and a conclusion)

Answer 13

1. Increased customer loyalty leading to additional sales
2. Strong brand image and reputation for quality; may attract new customers
3. May be possible to charge a higher price
4. Fewer returns, product recalls and replacements lowering costs
5. Can help to attract and retain high calibre staff
6. Reduces inspection costs
   => Overall, a competitive advantage can be gained

Question 14

The balance of quality (2):

Answer 14

• Whichever method of improving or maintaining quality a business chooses to adopt, it will have a cost.
• A business would have to balance these costs against the benefits, to ensure the quality method chosen is appropriate to the business needs.