Quality Production: Ensuring Excellence in Business

• Business
• Secondary Education

Quality Production: Ensuring Excellence in Business

IGCSE Business Studies

What are variable costs?

1. Expenses that remain constant regardless of the level of production.
2. Expenses that are unrelated to the level of production.
3. Expenses that change in direct proportion to the level of production.
4. Expenses that decrease as the level of production increases.

What is break-even?

1. The point at which a company starts making profit.
2. The point at which a company stops making profit.
3. The point at which total revenue is higher than total costs.
4. The point at which total revenue equals total costs.

What is contribution in business?

1. The difference between total revenue and total variable costs.
2. The amount of money a company makes in profit.
3. The total amount of sales made by a company.
4. The difference between fixed costs and variable costs.

What is the marketing mix?

1. The costs associated with producing goods or services
2. A strategy to calculate the break-even point
3. The costs involved in conducting market research
4. A combination of factors that a company uses to promote and sell its products

What are diseconomies of scale?

1. The costs of purchasing new technology
2. The cost disadvantages that occur when a company grows too large
3. The costs of hiring additional employees
4. The costs associated with product distribution

What are economies of scale?

1. The cost advantages gained by producing in large quantities
2. The costs incurred from producing a small number of units
3. The costs of maintaining and repairing machinery
4. The costs associated with market research and development

What are fixed costs in business?

1. Costs that decrease as the production or sales increase
2. The costs incurred from purchasing raw materials
3. Costs that do not change regardless of the level of production or sales
4. The costs associated with marketing and advertising

Learning Objectives

At the end of the lesson, you will be able to: 

• Define quality production
• Identify ways to ensure quality through quality control and quality assurance
• Evaluate their advantages and limitations.

What do you already know about quality production in business?

What is 'Quality' Production?

Quality production refers to the process of manufacturing or delivering products and services that meet or exceed customer expectations and requirements.

McDonald's Quality

Do you consider McDonald's a quality service?

Why? Why not?

McDonald's Quality

McDonald's would be considered a good quality service.

• People know what to expect
• Service is consistent, 
• Whether you are in London or Manila, a Big Mac Meal is the same taste, delivered with the same speed and ease.

McDonald's Quality

Quality therefore  does not necessarily mean producing an excellent product, but more simply meeting expectations.

Benefits of Quality Products

Quality products help: 

• Gain customer trust, 
• Enhance reputation, 
• Build brand loyalty, 
• Gain a competitive advantage in the market
• Increase sales

Consequences of Poor Quality

Poor quality can lead to: 

• customer dissatisfaction,
• loss of reputation,
• decreased sales, 
• increased costs due to returns
• potential legal issues

What is Quality Control?

Quality control is the process of inspecting, testing, and monitoring products or services during production to ensure they meet quality standards.

What is Quality Control?

• Random samples are taken at the end of production.
• If errors or faults are found, a whole batch might be scrapped or reworked.
• Services might use a 'mystery customer' to test service quality.

Advantages of Quality Control

Quality control helps: 

• identify and rectify defects at the end of production, 
• reduces the likelihood of faulty products reaching customers, 
• less training is required for the workers

Limitations of Quality Control

• Quality control focuses on detecting and fixing, but it doesn't prevent occurrence
• May increase production costs,
• Can lead to delays in product delivery.

What is Quality Assurance?

Quality assurance is a different approach where quality standards are checked throughout production by employees.

QA focuses on all aspects of production.

Advantages of Quality Assurance

Quality assurance:

•  reduces the likelihood of defects before production is complete
• improves overall process efficiency, 
• reduces costs of product reworks

Limitations of Quality Assurance

Quality assurance measures can be:

• time-consuming and costly to train employees 
• may require significant process changes, 
• needs committed employees

Textbook p. 247 - Question 1

Write down 3 things you learned in this lesson.

Have students enter three things they learned in this lesson. With this they can indicate their own learning efficiency of this lesson.

Write down 2 things you want to know more about.

Here, students enter two things they would like to know more about. This not only increases involvement, but also gives them more ownership.

Ask 1 question about something you haven't quite understood yet.

The students indicate here (in question form) with which part of the material they still have difficulty. For the teacher, this not only provides insight into the extent to which the students understand/master the material, but also a good starting point for the next lesson.