Quality is a word that has a nebulous meaning, because everyone seems to think they know what quality means yet most folks disagree.Think about how you would describe a quality car, coat, party, singer, dancer, football player, soccer player, performer, boat, airplane, necklace, blanket, house, friend, and etc.Before you read any more, spend a few minutes trying to describe how quality could be described for some of the items in the prior sentence.

In order for people to communicate, you need a definition of quality that everyone will agree with.The two definitions in the book arefitness for useandconformance to requirements.As long as the requirements are thorough and detailed, then you could consider that theconformance to requirementsconcept also includes fitness for use (this is my interpretation not the book's interpretation).

The control chart in Figure 8-3 represents a chart of the lengths of several sample rulers that were taken from a production run of a company that makes rulers.The client/purchaser determined that the definition of quality is that the rulers he/she would purchase, had to have a length of 11.90 to 12.1 inches.Considering only the length of the rulers, you can determine the quality of the ruler making process, because all of the rulers in the sample had lengths between the Upper Specification limit 12.10 and Lower Specification of 11.90 and met the requirements or specifications.This is an example of quality defined as meeting specifications. (The book example was constructed to explain the seven run rule, but from a practical standpoint, all of the rulers were purchased by the client because they met the client specifications for length.)

Suppose you are the president of a bank that processes loan applications and it takes an average of 3 weeks to process a loan and begin receiving income from a loan.Your company processes 1,000 loans of $100,000 or more each year at an average of 5% per loan.If you could speed up the loan approval process by an average of 1 week, then you could get 1,000 weeks of additional interest payments each year (one week each for 1,000 loans).

How would you go about determining if this is a reasonable suggestion, and if it is, how would you try to maintain the 2 week average processing time?

Answer rating: 100% (QA)

To determine if speeding up the loan approval process by an average of 1 week is a reasonable suggestion I would conduct a costbenefit analysis This a... View the full answer