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Applying TQM in Manufacturing versus Administration
One large company that has been successful in applying total quality management (TQM) principles in manufacturing reports that it has had less success in applying the same techniques in improving administrative functions such as order taking, distribution, and human resources. This company (which has won several quality awards and has significantly improved its product quality) used state-of-the-art TQM methods to train all of its employees in how to apply TQM. However, the company has not been able to achieve the same cost reductions and service quality enhancements in administrative areas as it has in the manufacturing area. Assuming that this phenomenon extends to other companies, why do you think that TQM works better in manufacturing than in nonmanufacturing/service areas?
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You are given the following information about the costs of a perfectly competitive firm.
What is the maximum purchase price that Martell Products should be willing to pay for the copier if the company's required rate of return is: Ten percent? Sixteen percent?
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