INDIAN INSTITUTE OF MANAGEMENT KOZHIKODE

EPGP Kochi- 08
Quality Management
Total Marks: 50 Marks
Duration: 3hrs

Instructions

· Answer all the questions. There are no choices.

· Answer all parts of the question together. For example, if Q. No. 2 contains sub
questions such as 2a, 2b and 2c, all these questions should be answered together in
sequence in one place. Draw diagrams neatly and legibly.
· THIS IS A OPEN BOOK EXAMINATION. Only textbook, reading materials,
cases and slide handouts are allowed.
· Use of scientific calculator is permitted, however use of mobile phone, laptop and
other electronic devices are not permitted during the examination.
· If you find any of the data missing for any of the questions, MAKE YOUR
OWN ASSUMPTIONS AND HIGHLIGHT THE SAME BY DRAWING A
BOX AROUND IT.

Question 1
A manufacturer receives shipments of several thousand parts from a supplier every week.
The manufacturer
has the option of inspection before accepting the
parts. Inspection cost is $1 per unit. If parts are not inspected, defectives become apparent
during a later assembly operation, at which time replacement cost is $6.25 per unit. LO1 &
2
a. At what proportion defective would the manufacturer prefer acceptance sampling?
b. For the sample size n = 15, what acceptance number c would result in probability of
acceptance close to .95 for AQL = 2%?
c. If the shipment actually contains 1 percent defective items and AQL =2 percent:
i. What is the correct decision?
ii. What is the probability that the lot would be
accepted if acceptable number c = 0?
iii. What is the probability that it would be rejected
if c = 0?
iv. Answer the questions in part c for a shipment
that contains 3 percent defective items. (10 M)

Questions 2

 Assume that you are the Operations Manager in a high-end business hotel. In recent times,
many customers have started to complain about the “poor quality of the food
in the restaurant”. Perform a Why-Why Analysis and identify the root cause
for the same.
Note: At least three stages of “Why” should be included. Under each stage of “why”, there
should be at least 2 different reasons. (10 M)
Question 3

Your immediate reporting manager was impressed with your transformation after
pursuing the MBA from IIM Kozhikode. She was super impressed with your
knowledge on “The House of Quality”. She asked you to solve a perennial
problem that exist in your organization using the same.
a. Highlight what is the perennial problem that exist in your organization
and explain the same.
b. Demonstrate the application of the HoQ to solve the same.
Note: Each and every block should be clearly explained. Merely drawing the HOQ is not
sufficient. For example, if you are including something in the voice of customer, you have
to explain briefly about the same. Similarly, the relationship blocks should also be
explained in terms of logic and strength. A minimum of 5 points should be in the voice of
customer and the voice of the process.
(15 M)

Question 4

Laxmi Steel Ltd. produces steel tubes. The steel tube process is a stable cut to length
operation that generates tubes that have mean of 12 inches and standard
deviation of 0.13 inches. The XYZ company Ltd wishes to buy tubes from
Laxmi Steel Ltd. The XYZ Company requires steel tubes between 11.87
inches and 12.33 inches in length.

a)
What proportion of the steel tubes manufactured by Laxmi Steel Ltd will
be rejected by the XYZ company?
b) Laxmi Steel Ltd decides to employ control charts to monitor the process
and decides to sample 4 tubes every hour. What type of control chart
would be appropriate for the given context? Give reasons to support to
your answer.
c) Compute the UCL and LCL for the control chart. What are the two sigma
limits for the process?
d) Using the data given, construct the control chart. Please make sure that
chart is included in your main write up.
e) What is Process Capability Index? What is the Cpk value of the current
process undertaken by the Laxmi Steel?
The manager of Laxmi Steel Ltd feels that current process needs improvement and employs
an expert to adopt Six Sigma at the factory. What should be the Cpk value in case, process
follows Six Sigma? Also, what should be the process variance in case the process becomes

a Six Sigma process? And what proportion of the steel tubes manufactured by Laxmi Steel
Ltd will be rejected by the XYZ company when the process follows Six Sigma?
(2 + 2 + 2 + 4 + 2 + 3 =15M)