Mario G. Beruvides

Using Opportunity Costs to Determine the Cost of Quality: A Case Study in a Continuous-Process Industry

ABSTRACT We investigated the strategic and economic importance of the cost of quality (COQ) in a firm whose production process is continuous. An empirical model was built to express the COQ as a function of two main components: traditional prevention-appraisal-failure expenses (PAF model) and opportunity losses. Opportunity losses were broken down into three components: underutilization of installed capacity, inadequate material handling, and poor delivery service. We conducted the six-month study in a company along the U.S.-Mexican border. Results show that the COQ expressed as revenue loss is mainly explained by the opportunity component. Also, the COQ expressed as profit not earned is explained by the opportunity variable but in a smaller proportion. Each variable was analyzed and specific recommendations were provided.

Structuring group decision making in a web-based environment by using the nominal group technique

The Nominal Group Technique (NGT) is a structured decision-making technique widely used both in industry and academia as a tool to aid in planning and decision-making processes. The main goal of this study was to evaluate the performance of NGT in a web-based environment compared to its traditional counterpart. Comparisons were made along several performance and process-related dimensions. First, the decision process and experimental methodology are introduced. Second, the interface design used during the online sessions is described. Next, the response variables were explored following two difference approaches. The first approach compared the response variables from the traditional and the online setting. The second approach assessed the differences in perceived values before and after the session was conducted. Results revealed that the traditional NGT outperformed the online version in the variables related to the process. However, traditional groups did not significantly differ from online groups with respect to the variables related to the outcomes. Finally, we suggest conditions for enhanced productivity in idea-generating and problem-solving groups by providing some sustaining evidence.

A Study on the Quality–Productivity Relationship and its Verification in Manufacturing Industries

Although many researchers believe that quality and productivity should be positively related, it is not uncommon for managers in manufacturing environments to doubt that this positive relationship exists. Most of the researchers who address quality and productivity base their assertions on logical reasoning and not on empirical mathematical models. The reason may be due to the small number of models that relate these two concepts. Another reason may be that the models that do exist have major deficiencies that cause them to be inapplicable in the real world. This article investigates the mathematical relationship between quality and productivity. A new mathematical model of the quality–productivity relationship is presented. Unlike existing models, this new model was designed not only to be descriptive but to also be applicable in industry. A field study involving two manufacturing industries was conducted to confirm applicability and validity of this model. Given that the model is based on profit, the results of this study substantiate the belief that quality and productivity improvement can produce increases in profit and are thus worthy of emphasis by engineers and managers as well as engineering economics researchers.

Performance patterns in face‐to‐face and computer‐supported teams

Purpose – This paper presents a longitudinal experimental study on teams with the purpose of investigating the impact of communication media on decision‐making teams. The authors aims to achieve that by comparing face‐to‐face (FTF) and computer‐supported (CS) teams over a series of three sessions on three response variables: performance, cohesiveness, and synergy.Design/methodology/approach – A total of 24 teams, each of five students, participated in three separate decision‐making sessions in which they solved a survival simulation scenario. Each team was randomly assigned to either face‐to‐face (FTF) or computer‐supported (CS) communication condition. The analysis compared overall means and mean patterns over time on the three response variables across the two communication media.Findings – Results suggest that there were no differences in overall performance between CS and FTF teams and no differences in performance changes over time between the two media; there were no overall differences in overall s...

Multiple Internal Rate of Return Revisited: Frequency of Occurrences

Research in multiple internal rate of return (MROR) has mainly focused on three areas: uniqueness, conditions where MROR occur, and solutions to MROR. In an attempt to solve for MROR, researchers have assumed that the occurrence of MROR is prevalent and thus a solution is direly needed. This article examines the probability that positive MROR would occur when variation is incorporated into the cash flow and the probability of getting positive MROR when multiple sign-change cash flow is generated. Results show that the probability of positive MROR occurring in multiple sign-change cash flows is relatively low and potentially a rare event.

An investigation of the work characteristic composition in blue-collar, white-collar, and knowledge work

This research study investigated eight specific work characteristics (outputs, inputs, work type, discretion level, work pursuit level, level of endeavour, decision type and maturity level), on three sub-populations of workers (production personnel, office/secretarial personnel, and university engineering professors). Thirty-one production personnel from two organisations located in the eastern part of the USA were used for the first group (B group). The second group (W group) comprised five office/secretarial personnel from a university engineering department. The third group (K group) was made up of six engineering professors from three separate universities located in the eastern and mid-western USA. The purpose of this research was to validate a specific work model (B/W/K). The design used stratified sampling. A modified chi-squared (contingency table) statistical methodology was used to analyse the data. The work definitions postulated by the B/W/K work model are supported by the research findings of this study. Specifically, four of the eight work characteristics (outputs, inputs, work type, and discretion level) of the work definitions are strongly supported by the results (p value << 0.001). The remaining four characteristics (pursuit level, endeavours, decision type and maturity level) show strong results (some p values <<0.001), but some aspects of the sub-classifications of the work characteristics are questionable.

Technology's impact on the future of industrial engineering

Industrial engineers of the future will be working with, and within, high-technology systems that will greatly affect not only how they do their work, but also the work they do. This paper addresses some of these emerging issues and presents the potential impacts on the industrial engineer of the future.

Management Theory DéJà Vu? Scientific and Total Quality Management

ABSTRACTThis article compares W. Edwards Demings total quality management (TQM) theory with Frederick Winslow Taylors scientific management theory. Although these two theories have in the past been misrepresented as philosophical opposites, the authors have researched and highlighted the extensive degree of similarity between the two. The recent rise in TQMs popularity prompts an examination of similarities between Demings and Taylors views on general management, operations management, and people management. Also presented are the new aspects of productivity addressed by TQM. Some time-tested productivity improvement primitives are described.

Modified Tukey's Control Chart

Phase I of control analysis requires large amount of data to fit a distribution and estimate the corresponding parameters of the process under study. However, when only individual observations are available, and no a priori knowledge exists, the presence of outliers can bias the analysis. A relatively recent and successful approach to address this situation is Tukeys Control Chart (TCC), a charting method that applies the Box Plot technique to estimate the control limits. This procedure has proven to be effective for symmetric distributions. However, when skewness is present the average run length performance diminishes significantly. This article proposes a modified version of TCC to consider skewness with minimum assumptions on the underlying distribution of observations. Using theoretical results and Monte Carlo simulation, the modified TCC is tested over several distributions proving a better representation of skewed populations, even in cases when only a limited number of observations are available.

Group decision support systems and consensus building: issues in electronic media

Abstract This paper explores the advantages and disadvantages of GDSS (Group Decision Support Systems) when compared to established consensus building techniques (Nominal Group Technique and Delphi Analysis). Practical and research recommendations are presented.