Regression analysis: Simple Linear Regression Multiple Linear Regression
Analysis of quality costs over time
1. Problem 1
Sl. No. Description Frequency
1 Soiled and dirty 23
2 Cuts and discontinuities 12
3 Improper specifications 19
4 Weight loss 31
5 Defective packing 21
(a) The histogram is given below:
Analysis of Cotton Dressing
35
30
25
Frequency
20
15
10
5
0
2. (b) The data is rearranged here to draw the Pareto Diagram:
Sl.No. Description Frequency Cumulative %
1 Weight Loss 31 29.25%
2 Soiled and dirty 23 50.94%
3 Defective packing 21 70.75%
4 Improper specifications 19 88.68%
5 Cuts & discontinuities 12 100.00%
Analysis of Cotton Dressing
35 1.2
30
1
25
0.8
Frequency
20
0.6
15
0.4
10
0.2
5
0 0
Weight Loss Soiled and dirty Defective Improper Cuts &
packing specifications discontinuities
The recommended course of action would be to tackle the
weight loss issue first. The weight loss issue could be
subject to analysis to determine the cause of this defect.
The issue of soiled and dirty dressings also needs to be
taken up concurrently because these two issues cover more
than 50% of the defective items.
3. o Diagram:
1.2
1
0.8
Cumulative %
0.6
0.4
0.2
0
tackle the
e could be
this defect.
needs to be
s cover more
4. Problem 2
Employees unaware of
customer waiting time
Manpower shortage Space constraint
Inequitable work
Lack of training
Level of technology
low
Lack of motivation
Absenteeism
Number of accounts
handled is escess of
capacity
Too much variation
in service offerings
Unrealistic expectations
by customers
CAUSE
5. Employees unaware of
customer waiting time
Inequitable workload
Procedural delays
Lack of
standardisation of
service
Delay in
Customer
Service Time
EFFECT
6. Problem 4
Sl. No Description of item of cost 2002 2003 2004
1 Warranty costs 12,532.00 11,540.00 12,320.00
2 Cost of rework 9,348.00 18,540.00 17,439.00
3 Training costs 234.00 567.00 893.00
4 Supplier Development costs 1,238.00 2,345.00 3,459.00
5 On-site repair of products 8,345.00 7,934.00 7,839.00
6 Cost of testing 4,567.00 5,672.00 5,789.00
7 Loss from Product returns 4,562.00 4,234.00 2,389.00
8 Inspection costs 7,812.00 12,127.00 17,283.00
9 Calibration of testing devices 1,678.00 1,482.00 2,093.00
10 Scrap 2,568.00 4,298.00 6,238.00
(a) The quality costing is given as follows:
External Failure 25,439.00 23,708.00 22,548.00
Internal Failure 11,916.00 22,838.00 23,677.00
Appraisal 12,379.00 17,799.00 23,072.00
Prevention 3,150.00 4,394.00 6,445.00
Sum 52,884.00 68,739.00 75,742.00
(b) The cost of quality as a percentage of the total
turnover is given in the following table, the
contribution of individual quality cost components
are also shown:
2002 2003 2004
Annual Turnover
200,000.00 240,000.00 300,000.00
Rupees (in '000s)
External Failure 13% 10% 8%
Internal Failure 6% 10% 8%
Appraisal 6% 7% 8%
Prevention 2% 2% 2%
7. COQ (%) 26% 29% 25%
(c)
Quality Cost Components
External Failure Internal Failure Appraisal Prevention
0.35
0.3
Percentage values
0.25
0.2
0.15
0.1
0.05
0
2002 2003
Significant trends observed from the chart (above) are:
1. Steady decline total quality cost
2. Amongst the components, prevention cost shows no variation, however as
the external failure cost goes significantly down, internal failure costs
and appraisal costs go up
