Homework 2

Problem 1

Amazon operates what is considered to be an “open market” wherein it provides space and opportunity on its
website for independent, competing companies to sell products. Discuss the types of quality problems that this
arrangement might pose for Amazon, and how it might deal with quality problems in this kind of open marketplace
environment?

Problem 2

The operations manager of a firm that produces frozen dinners had received numerous complaints from
supermarkets about the firm’s Chick-n-Gravy dinners. The manager then asked her assistant, Ann, to investigate
the matter and to report her recommendations.

Ann’s first task was to determine what problems were generating the complaints. The majority of complaints
centered on five defects: underfilled packages, a missing label, spills/mixed items, unacceptable taste, and
improperly sealed packages.

Next, she took samples of dinners from the two production lines and examined each sample, making note of any
defects that she found. A summary of those results is shown in the table below. The data resulted from inspecting
approximately 800 frozen dinners.

1. Construct a Pareto chart using the data from the table below
2. What should Ann recommend to the manager? (note: your recommendation must include a concrete
solution to the problems)

Problem 3

Students at the International University of Grand-Bassam (IUGB) trying to register for a course sometimes find that
the course has been closed, or the section they want has been closed. Prepare a cause-and-effect diagram for this
problem.
Problem 4

Yonda is a fast-food restaurant that processes an average of 680 food orders each day. The average cost of each
order is $6.15. Four percent of the orders are incorrect, and only 10% of the defective orders can be corrected with
additional food items at an average cost of $1.75. The remaining defective orders have to be thrown out.

a- Compute the average product cost and the quality productivity ratio (QPR).
b- In order to reduce the number of wrong orders, Yonda is going to invest in a computerized ordering and
cash register system. The cost of the system will increase the average order cost by $0.05 and will reduce
defective orders to 1%. What is the annual net cost effect of this quality-improvement initiative?
c- What other indirect effects on quality might be realized by the new computerized order system?

Instructions

 Use Microsoft Word to answer the questions to the problems above and upload a copy of your work in the
“Assignment 2” folder on Moodle.
 Use Microsoft Excel to construct the Pareto chart in problem 2 and then copy and paste the chart into your
Word document. Also, copy and paste the table containing the percentages into your Word document
before uploading it in Moodle. No Excel file should be uploaded in Moodle.
 Use the drawing tools in Microsoft Word to draw the cause-and-effect diagram in problem 3.
 You must show all the details of your calculations for problem 4.