Question 1:

(a) ‘One of the most powerful concept as advocated by Total Quality Management is that of the internal customer and supplier.'

With reference to examples you are familiar with, discuss this concept and its importance in the management of quality.

(b) Discuss the factors necessary for the implementation of a quality improvement tool like TQM, in an organization.

Question 2:

(a) ‘It is often believed that productivity is inversely proportional to quality.' Discuss this statement, with reference to examples.

(b) You have been assigned the responsibility by ANZ bank to carry out a study on the impact of the implementation of a quality improvement project on productivity.

Tickets are processed by a computer in the loans department.

Prior to the implementation of the project, the number of tickets processed during a month was 6259. The labour hours for the month was 810 at a cost of Rs 150 per hour. Systems and computer run time has been allocated a fixed rate of Rs 4000 per month. Each form costs Rs 0.86. In order to process 6259 tickets, 7000 forms were used.

After the implementation of the quality improvement project, data were again collected. It was found that 7200 tickets were processed using 7200 forms. Amount of labour time decreased and amounted to 750 hours for the month. The base costs did not change.

(i) Explain the utility of base costs in the calculation of productivity index.

(ii) By performing appropriate calculations, determine whether the quality improvement project has led to an improvement in productivity.