 | Term | Definition |
| |
Appraisal Costs |
Costs incurred to detect which of the individual units of products do not conform to specifications |
| |
Average Waiting Time |
The average amount of time that an order will wait in line before machine is set up and order is processed |
| |
Bottleneck |
An operation where the work to be performed approaches or exceeds the capacity available to do it |
| |
Cause-and-Effect Diagram |
Diagram that identifies potential causes of defects. Four categories of potential causes are: human factors, methods and design factors, machine-related factors, and materials and components factors |
| |
Conformance Quality |
Refers to the performance of a product or service relative to its design and product specifications |
| |
Control Chart |
Graph of a series of successive observations of a particular step, procedure, or operation taken at regular intervals of time. Each observation is plotted relative to specific ranges that represent the limits within which observations are expected to fall |
| |
Costs of Quality (COQ) |
Costs incurred to prevent, or the costs arising as a result of, the production of a low-quality product |
| |
Customer-Response Time |
Duration from the time a customer places an order for a product or service to the time the product or service is delivered to the customer |
| |
Design Quality |
Refers to how closely the characteristics of a product or service meet the needs and wants of customers |
| |
External Failure Costs |
Costs incurred on defective products after they are shipped to customers |
| |
Internal Failure Costs |
Costs incurred on defective products before they are shipped to customers |
| |
Manufacturing Cycle Time |
Another term for manufacturing lead time |
| |
Manufacturing Lead Time |
Duration between the time an order is received by manufacturing to the time a finished good is produced |
| |
On-time Performance |
Delivering a product or service by the time it is scheduled to be delivered |
| |
Pareto Diagram |
Chart that indicates how frequently each type of defect occurs, ordered from the most frequent to the least frequent |
| |
Prevention Costs |
Costs incurred to preclude the production of products that do not conform to specifications |
| |
Quality |
The total features and characteristics of a product made or a service performed according to specifications to satisfy customers at the time of purchase and during use |
| |
Theory of Constraints |
Describes methods to maximize operating income when faced with some bottleneck and some non-bottleneck operations |
| |
Throughput Contribution |
Revenues minus the direct material cost of the goods sold |
| |
Time Driver |
Any factor in which a change in the factor causes a change in the speed of an activity |
