...memo Company name | To: | John West Director of Southern Division | From: | Lorelei Skabowski | CC: | Managers | Date: | 7/22/2016 | Re: | Vehicle Fleet Costs | Comments: | | We have done a great job this year driving our business forward and delivering on revenue and market share. Importantly, our division has been vigilant on costs and we have been able to manage our overall cost structure aggressively. However, as you are all aware, we continue to operate in a difficult environment, and we have more to do on cost savings. I have spent the last couple of months reviewing research on the best approaches. I am now comfortable summarizing my finding on our direction. Cost of quality is a methodology that allows an organization to determine the extent to which its resources are used for activities that prevent poor quality, that appraise the quality of the organization’s products or services, and that result from internal and external failures. Having such information allows an organization to determine the potential savings to be gained by implementing process improvements. Quality-related activities that incur costs may be divided into prevention costs, appraisal costs, and internal and external failure costs. I want to review the three (3) types and how they affect your Cottman garage. Prevention costs are attempts to prevent defects from occurring. They include costs from planning and administrative systems. Topics to think about training of employees...
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...There are many entrepreneurs who come together as an organization and build an entrepreneurial culture to seek opportunities for innovations. An entrepreneurial culture is an environment where entrepreneurs are inspired to create new innovations. Innovation is basically to have a new idea, to change something from the old and make it new. The way people interact with one another and recognize their environment is all a part of a culture. In a business industry setting, entrepreneurial cultures are defined as the business owners getting together to inspire each other to brainstorm new ideas/ products, innovations. There are many companies out there that exemplify innovation. One that comes to mind and I believe everyone can agree is Apple Inc. Apple is known for their cell phones, however they are always improving. How many new phones have they come out with in just the last 2 years? They have phones with different data storage, different sizes, and they are always adding new ways to appease the consumer. But why is innovation important? I have listed a few examples stating why entrepreneurial organizations seek out probabilities for new innovation. One reason these entrepreneurial organizations seek opportunities for innovation is to offer their consumers new products/services. Their development of new products and approaches sharpens the industry which is in the long run is valuable to the consumer. New products and services are the essence of all businesses. This is crucial...
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...Costs Effected By Returns and Customer Complaints in Boot Division There are three types of costs when quality considerations are made, appraisal costs, prevention costs, and failure costs. Failure costs include internal and external failures. An explanation of these costs are listed below: * Appraisal costs are costs that the company incurs to ensure quality or uncover defects. This includes but is not limited to costs such as testing equipment, inspection of materials, labs, quality audits, field-testing, and other inspection costs. * Prevention costs are the costs associated with preventing defects from occurring. This includes costs such as the designing a better quality product, increased maintenance on equipment, quality control procedures, training of employees, planning and administration procedures, working with vendors, and any extra time that is devoted to decreasing the probability of defective workmanship. * Defective parts or products by faulty services cause failure costs. * Internal failures are failures that are discovered during the production process or prior to the customer ever coming into contact with the product. There are many reasons the internal failures can occur including defective materials, incorrect methods or processing, or faulty equipment. * External failures are failures that are discovered after the customer has the product. This type of failure becomes very costly to the...
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...Name QHT1 Task 4 9/6/2015 As a manager of a business it is important to know how to overcome the communication barriers. I will list the four key types of communication barriers and how to avoid them so a company can run more productively. The four categories are process barriers, personal barriers, physical barriers, and semantic barriers. Process barriers are having an issue of communication between the sender and the receiver. An issue occurs when the message has too much information and it’s confusing, having a fear of criticism or language differences. To tackle this problem, as a manager I would apply such methods as explaining my message I send to make sure the receiver understands it, or just set up meetings or conduct one on one conversations to communicate messages. Personal barriers are the real or imagined deterrents between you and the success you want to achieve. The best way to overcome personal barriers is to identify what keeps you from achieving your goals, and then take steps to remove those barriers and focus on the positives. It’s also important to not overstep privacy boundaries of others. (Barriers to Effective Communication) Physical barriers can prevent people from having effective communication The environment can have an effect on it, such as not be able to communicate clearly because of weather conditions, or being in an area where it’s too noisy and crowded it can be hard to hear what the other person is saying. Important work related conversations...
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...| ABC COMPANY | Memo To: | Jane Doe, President of ABC Company | From: | Anne Sobala, Quality Control Manager | cc: | John Doe, Vice President of ABC Company | Date: | July 12, 2014 | Re: | Quality Control Costs | | | I would like to bring to your attention three types of costs regarding quality in our company. These costs are appraisal costs, prevention costs and costs associated with failure of control (Register, 2003). Appraisal costs would be material inspection costs, test and inspection of equipment, and quality audit costs. These would be a total cost of $163,000 per year to the company and would include including the cost of purchasing testing equipment to test and inspect our equipment at $86,000 per year. The quality audit would cost us $45,000 per year to hire an external auditor to carry out the audit and appraisal of our operations. The final cost is for material inspection at $32,000 per year. Costs associated with prevention of poor quality would include quality training and staff development costs, cost of production quality verification and investment in quality related system and equipment maintenance costs and would cost us $ 141,000 per year. The cost of undertaking training on all staff would be $22,000 per year. Equipment costs are per purchase and would be $145,000. There should not be a need to replace the equipment before its useful life ends. We would however need to maintain the equipment in good working condition and have the equipment serviced...
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...QHT1 Task 1 3.04.3 Memo To Jane Doe-Supervisor Date: June 15th 2015 Re: Cost of quality As has been well documented that when it come to quality, there are three major costs to consider that will affect price, customer loyalty, market share and so forth right down the line. These are appraisal costs, prevention costs and failure costs, both internal and external. Please see explanation below. Appraisal costs consist of and are not limited to things like testing and inspections of products and production equipment, quality audits, laboratory research and field-testing. An example of this being the monthly shutdowns of the production equipment for maintenance, inspection and repair. Also the weekly lab testing both destructive and non destructive. Prevention costs are the costs associated with preventing defects from happening at all, such as training of employees, production workers, and vendors that supply parts and labor. Also planning and administrative costs and other quality control measures. An example would be the new hire training and on going continuing education programs for all employees associated with production. Internal failure costs would be cost associated with failures in the production plant. These failures can be from inferior raw materials, improper production techniques, worn or faulty production equipment or simply human error. An example being last month when the production furnace temptaure was mistakenly set at 850 degrees instead...
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...Overcoming communication barriers There are four main types of barriers in communication. Any of these barriers can ruin the chances of success in any given project or task that we are trying to achieve here at XYZ Company. I was asked by our Vice President to give some suggestions and guidelines to help you avoid these barriers, which will allow your team to run more productively, with less need to take corrective actions, and decrease frustration within the team. Let us start with process barrier. There are specific steps needed for a successful communication. The process barrier includes your ability to create a message, presentation, project plan, etc. The next steps are assuring that the message is transmitted to the receiver (subordinate, peer, direct manager, executive). They in turn must receive, absorb and internally process the information and correctly understand the meaning and intention of your message. On the surface, this sounds straightforward and easy. This is not always the case. I have established some methods that I use to give my messages a high probability of success without a lot of back and forth communications. Keep in mind that the length and level of technical information can necessitate more communications to reach a successful end. • Start with some straightforward background, and then explain what is expected from the receiver, and the timeframe for any actions to be complete. • Do NOT use acronyms. Not all people in this company or our...
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...Four Reasons for Innovation Organizational leaders are always looking for a way to grow their business. Successful leaders understand the business world is changing quickly and often. In this competitive business world, leaders need to get moving on their innovation strategy. The following will list a few reasons why organizations look to innovate. 1. To Survive Organizations need to stay ahead of the competition in order to survive or they will go out of business. It is important for a business to stay at the top of their industry and be the “go-to” innovator for clients. A willingness to think big and think differently is vital to stay afloat. In order to survive, changes are needed. Subtle changes would be best to reap the rewards. Drastic changes can scare clients into the competitions lap. Transforming how an organization thinks is the key to surviving. 2. To Make a Profit The top reason most organizations are in business is to make money. It is a competitive market and if you want your clients to open their wallets, they need a reason to buy from you. What does your product offer that your competition does not? Does it add value to your client’s vision and what they are trying to achieve? Whatever your product is, make sure it is different and your company can do it well. Where there is distinction, there are profits. 3. Culture and Core Values Changing the culture within an organization gives everyone responsibility for innovation. Employees will thrive in an environment...
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...To: James Hodges Date: 23 February 2016 From: XXXXXXXX Facility: XXXXXXXXX Subject: Quality Costs Jim, the purpose of this memo is to update you on the quality issues we’re having at the Coachella packing house. Rejection costs are mounting due to the quality deficiencies not being addressed at this location. The costs can be boiled down to: Prevention, Appraisal and Failure Costs Let’s first start off with Prevention. There are too many choice peppers making it onto the packing line, which means they’re making it to the customer. The choice peppers should be diverted to the cull buyer and not make it into the packing house. A 2-3 hour grading refresher course for both the harvesting and packing house personnel will impact production for half a day, but the benefits will outweigh the cost and inconvenience of the down time. Aweta, the manufacturer of the processing line will be contacted to come out and re-calibrate the sorting line cameras and sizers. Costs incurred will be minimal, as this is part of the maintenance contract. And this can also be done in conjunction with the grading course refresher. Downtime will be minimal. The second cost center is Appraisal. Currently we only have two quality control inspectors, we need two more. Having two additional inspectors will allow us to have one dedicated inspector in the receiving bay. This inspector will be able to halt any suspect shipments before they even make it into the packing house. This will...
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...M E M O R A N D U M TO: Supervisor, Name FROM: Name Re: Cost of Quality considerations Date: December 6, 2013 Mr. Name We as a manufacturer of tangible products must ensure our merchandise is of the best quality before it reaches the consumer. This is imperative if we are to maintain a competitive advantage in the marketplace, while in addition earning repetitive and referral business from our customers. There are three main types of costs associated with producing quality products. If we are aware of the following costs of quality, and implement them in areas in need of improvement, the quality of our merchandise will improve, our customer satisfaction will improve, and our reputation will improve, resulting in a more prosperous business. The three types of costs associated with quality considerations are prevention costs, appraisal costs, and internal/external failure costs. Prevention costs are the most effective way to mitigate problems with production quality. Prevention costs are comprised of processes the organization can take to proactively avoid defects. For example, we should ensure our employees have the right tools for their jobs; they have safe working conditions; all new employees are properly trained, and existing employees are continually trained in their areas of responsibility. The Prevention costs will help the organization by providing our employees the tools, training, and procedures needed to reduce the amount of defective products coming off...
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...BARRIERS TO COMMUNICATION In any organization effective communication forms an essential part of the organization’s growth and progress. However, it has been seen that this is not always the case. This istrue in today’s globalized world when one has employees coming from different ethnic, cultural and religious backgrounds working together. If the reasons for communication failure are examined it has been found that they fall in four distinct categories. These are: 1) Process or organizational barriers. 2) Personal barriers 3) Physical barriers 4) Semantic barriers These categories will be examined in detail, one by one. Organizational or Process barriers: The organizational barriers are mostly related to the organizational structure. Effective communication has to be vertical as well as horizontal. This is where the structure determines whether this communication assisted or hindered by the structure. However the various factors within the process or organization will be examined below. 1) Organizational policies: These policies determine the relationship between the various levels in the organization and how communication occurs between these levels. For instance, if policy dictates that all communication must be in writing, then even the smallest request has to be put in writing. This can hinder effective communication due to the delays in writing the request. 2) Rules and regulations: Organizational rules...
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...Student: John Loyd Student ID: 000329013 Course: QHT1 Business Management Tasks Task 1 Cost Quality Relationship Product production comes with many types of costs. Four of the most common costs are prevention costs, appraisal costs, internal failure costs and external failure costs. These four costs are called quality costs and are costs that all businesses that produce products will pay. The amount of money that will go to each cost is dependent on the amount spent on the other costs. In other words, an increase in one type of cost can result in a decrease in another. Businesses need to understand the nature of each cost in order to understand for which cost to budget. The first type of cost is prevention costs. Prevention costs are the most vital costs in which to invest. Prevention costs are the costs that are acquired when the company prevents the occasions of defects in the first place. Basically, this is the cost of producing quality products. These costs include improvement in the manufacturing methods used to make the product, properly maintain the equipment that is used, maintaining a good relationship with vendors, employee training and more. Any cost that is associated with the lessening of creating faulty products is a prevention cost. For instance, a company that pays trainers to fully train each employee and offers paid training will see a decrease in the human error involved in manufacturing. A company that does not take the time to do this will...
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... To: Supervisor From: Management Re: Cost of Quality Cost of Quality in Manufacturing I will explain in the following the three types of costs there are when making quality decisions in our manufacturing site in regards to the cost associated in making quality products. 1. Internal failure cost - This is the cost found on defects before it is delivered to the internal or external customer. 1.1. External failure cost – This is the cost associated for defects found after they are delivered to the internal or external customer. 2. Appraisal costs – This is the cost associated in maintaining a quality standard or program. 3. Prevention costs – This is the cost associated with keeping both appraisal cost and internal/external cost to the lowest level. A great example of internal/external cost would be the impact to our internal customer in dollar terms of the quality defect, I.E machine downtime because of a bad part damaging a machine. A great example of appraisal cost would be a inspection process we maintain to ensure quality product for our external customers and the cost of the people doing the inspection. A great example of prevention costs would be in the wages we pay to the engineering team for ensuring a quality designed product. Now I will evaluate the three types of cost considering the tradeoffs within our manufacturing plant. Internal failure cost is high for failures due to the disruption that occurs to our downstream customers. You...
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...To: Boss From: Tom Date: July 5th 2016 Subject: Follow up from our meeting on costs Boss I wanted to follow up with you and let you know where we are from our previous meeting in reducing our defective products, increasing our productivity by running an efficient manufacturing process and improving our image with our customers. Our division is focused on the three areas for cost quality and feel that we can improve these metrics that we have agreed upon. We will review the three focuses on appraisal, prevention and failure costs. Our focus on appraisal costs within the organization has been directed towards inspecting the equipment on a daily basis. Though this takes a few minutes each day and delays us from firing up the equipment and manufacturing our product. It has given us the ability to ensure that we are using equipment that is working at it’s best. We will also review the raw materials to ensure that it is the highest quality. By doing this we have decided to purchase from other suppliers which has increased our cost a bit but are confident we are able to hit our quality standards. Prevention costs have been focused on reducing our defects. Per our previous conversations to eliminate defective products we have really focused efforts in this area by putting in place training for our employees who are running the machines. The reason we are doing this because we did an analysis and found that multiple errors occurred due to the lack of training both with the equipment...
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...Memo: As we continue to move toward the end our quarterly objectives. I wanted to take the time to explain some of our costs. In our particular field of designing and manufacturing products, we are always engaging in ways that we can mitigate loss and improve our processes. Performing such changes will give a stronger presence in the market by allowing us to remain competitive. While we are performing our analysis on different aspects of the company, we look at the three main types of cost. When we remain devoted to improving our costs, and the faults related, we show our same devotion to our consumers. This is portrayed by the quality of products we put on the shelves. Prevention costs, appraisal costs and Failure costs are areas that we must strive to mitigate any loss from our past experiences. Prevention cost is an expense related to our efforts in quality control. If we take necessary measures to proactively identify and prevent loss from our processes, the cost associated with actions would be our prevention cost. This was recently seen by the required staffing training we implemented for all employees working on the assembly line. This was our way of making sure that we out our best foot forward and in-turn reduced potential loss seen in prior months of similar capacity. Appraisal costs are how we were able to identify the need for the previously mentioned preventative cost. Appraisal cost is the cost incurred for activates helping us to make sure we have unswerving...
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