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Statistical Process Control….Contd.

SPC learning through examples:

Example # 1 Shooting for Quality:

Mr. Khan observed that in basketball games, his son Ali’s free throw percentage averaged between 45 and 50 percent.
Ali’s process was simple: Go to the free throw line, bounce the ball four times, aim, and shoot. To confirm these observations, Ali shot five sets of 10 free throws with an average of 42 percent, showing little variation among the five sets.
Mr. Khan developed a Cause-and-Effect Diagram to identify the principal cause/s. After analyzing the diagram and observing his son’s process, he believed that the main cause was not standing in the same place on the free-throw line every time and having an inconsistent focal point. They developed a new process in which Ali stood at the centre of the line and focused on the middle of the front part of the rim. The new process resulted in a 36 percent improvement in practice. Toward the end of the 2004 season, he improved his average to 69 percent in the last three games.

Read more: MGT510 - Total Quality Management - Lecture Handout 40

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INTERNATIONAL TRADE THEORY

THE FACTOR-PROPORTIONS THEORY:

The Heckscher-Ohlin theory of factor endowment is useful in extending the concept of comparative advantage by bringing into consideration a nation’s endowment and cost of factors of production. The theory holds that a country will tend to export products that utilize factors of production relatively abundant in that nation.

Land-Labor Relationship:

In countries with many people relative to the size of the available land, labor would be relatively (comparatively) cheap; thus those countries should concentrate on producing and exporting labor-intensive goods.

Labor-Capital Relationship:

In countries where little capital is available for investment and where the amount of investment per worker is low, then low labor rates would also be expected. Again, those countries should concentrate on producing and exporting labor-intensive goods. (The fact that labor skills tend to vary across countries has led to international task specialization with respect to national production activities.)

Technological Complexities:

Factor proportions analysis becomes complicated when the same product can be produced by different methods, such as with different mixes of labor and capital. Managers must consider the cost in each locale, based on the type of production that will minimize costs there.

Read more: MGT520 - International Business - Lecture Handout 23