COLEGIO DE LA PURISIMA CONCEPCION

COLLEGE OF BUSINESS MANAGEMENT AND ACCOUNTANCY

ROXAS CITY
CLASSWORK WORKSHEET

NAME OF STUDENT: YEAR AND SECTION:

Mona Liza S. Olisco BSA 2-A
FACULTY: SUBJECT:
EMMANUEL B. BARTOLO, MRAP,Ph.D. OPERATION MANAGEMENT/TQM

1. How would you describe performance measurement?

Performance measurement is the process of gathering data about the individuals or
groups that are responsible for the activities inside an organisation, or the overall
performance of the organisation itself and reporting the information to the top
management.

2. Why do companies must be consistent in monitoring and improving their performance?

Companies must be consistent in monitoring and improving their performance in order to
determine and fix the activities or individuals that may hinder in the development of the
company and maintain the increase in their productivity and profit. By the improvement
of their performances, the company will be able to continue being competitive in the
market locally and globally.

3. Some companies are not doing DEMING’s principle for continuous improvement but why
is it they still remain in the market?
Some companies still remain in the market even without applying DEMING’s principle for
continuous improvement, because I believe they apply other principles in order to keep
the improvement up on their operations. Some depends on the capabilities of their leader
and how he/she manifest their own principles and apply it to keep the company running.

4. What is productivity? Why do we measure productivity?

Productivity describes various measures of the efficiency of production. It measures the
output per unit of input, which includes labor, capital or any other resources used in the
process.
We measure the productivity in order to fully utilize the organization’s resources that can
result to customers’ satisfaction. By measuring the productivity, the organization will be
able to set and provide objectives and standards that will be followed by the whole
management. As productivity is a key factor to measure the business performance of an
organization, many businesses use productivity metrics in order to measure their own
performance and asses their own progress.

What shall we measure?

In measuring, I believe it begins with the different areas and processes of the
management, these include the primary goals/objectives of the organization, in order for
the management to set their own standards and construct their visions and missions;
measuring the problems that occurs and may occur is also significant, as through this way
the management can determine on how to counter these difficulties and improve the
management; measuring the possible opportunities for the organization is also important,
in order to come up with possible actions to utilize for the improvement of the
organization and; lastly, which concerns with the customer satisfaction, where the
organization must gauge what are the requirements of their customers that will be
applied to the process of their products.

Where do we measure it?

In measuring, there are three components that must be examined, these are: human,
technical and business components, where human component is of major importance
that must pass and involve in any measures of the key tests, they may be: transparent,
non-controversial, internally consistent, objective and motivational. In technical
component, this deals with the operation management of the organization, where they
must be correct, precise and accurate. Lastly, in business component, the measurement
must have significance not only to the whole management, but also to the customers
who have the contribution (i.e. feedbacks) to the process of productivity.

How do we measure it?

In measuring, it requires several stages and the system must be designed to measure the
progress, and progress is important in five main areas, including: effectiveness, efficiency,
productivity, quality and impact.

Formulas:
Effectiveness – deals with the output side of the process and measures whether the
organization is operating the way it should or if it is achieving their expected results.

It is defined as the percentage actual output over the expected output.

Actual output
Effectiveness = ––––––––––––––––– x 100 per cent
Expected output

Efficiency – deals with the input side of the process and measures the management
system of process, whether they use resources efficiently, may it be the labor/staff,
equipments, data, supplies, etc.

It is concerned with the percentage resource actually used over the resources that were
planned to be used.
Resources actually used
Efficiency = ––––———————––––––––––––– × 100 per cent
Resources planned to be used

Productivity – deals with the measurement of relating the process of output to its input.
May be expected or actual productivity:
Expected output
Expected productivity = ––––———————––––––––––––––––
Resources expected to be consumed
 Actual output
Actual productivity = ––––———————––––––––––––––––
Resources actually consumed

Quality – measures whether the products or services meets the requirements of the
customers , while implementing the objectives, strategies and techniques that solves the
problems on the way.

Impact and value added – deals with measurement of the overall performance and
management of the organization, in which the improvement are being monitored over
time, to determine if there changes and improvements to be administered.
Net profits before tax
ROVA = –––––––––––––––––––––– × 100 per cent
Value added

5. What is quality cost?

Quality costs are the costs associated with preventing, detecting, and remediating
product issues related to quality. These costs are incurred to the products that achieved
the standard requirement that meets the customers’ satisfactions. Quality costs fall into
four categories, these are: Prevention costs, Appraisal costs, Internal failure costs and
External failure costs.

6. Why do we need to measure quality cost?

We need to measure the quality cost in order to determine the range of the resources
that are used and will be used in the process of manufacturing of the product. This way,
poor quality will be prevented and also allows the organization to determine the possible
savings if there are changes to be executed.

7. Discuss the Cost related expenses. Differentiate one over the other.
The differences of the cost related expenses are, first, Prevention costs, are costs incurred
to avoid or minimize the defects in the product or services; while, Appraisal costs are
costs incurred to maintain the desired level of quality of products or services; then,
Internal failure costs, are costs that are related to the defects or failures on the product
or service that are found, before it is delivered to the costumer; and lastly, external
failure costs, are costs incurred that is also related to the defect or failure on the product
or service, but are found after it is delivered to the customer.

8. What are considered waste cost? To explain you need to use a table.

Nature of Expense Cause of Expense

Landfill tax Form of tax applied in order to increase
the cost of landfill. Finance and
reputation of the company will be
affected, as this expense rate does not
only rises, but when there is more waste
than recycle, the reputation of the
company will be viewed in a negative
 way.
Radioactive and/or other Fuels These are by products of onsite
production processes as these materials
are used in a wide variety of
manufacturing industries; toxic wastes
that need to be dealt with safely, if not,
may cause harm to nature and the
humans.
Capital costs for waste collection/transfer Cost expense incurred due to the
vehicles operation of collecting and transferring of
waste materials to the proper place.

9. To whom do these expenses are levied upon? Why?

The expenses are levied by the waste contractor or the disposal facility operator of the
management. These expenses are levied upon them, because this encourages the
business facilities to take responsibility for the waste they produce, this is to prevent the
waste to increase and foster the 3 R’s, reduce, reuse and recycle.

10. Discuss why is Quality management shall be embedded in a company’s operation. What
particular instance that it should be part of the program
Quality management must be embedded in a company’s operation, because I believe that
through this management, the quality of the products and services will be ensured that it
will meet the requirements of the customers. For me, Quality management must be part
of the process of the organization, as it ensures the utilization of every resources of the
organization, while improvement and changes will be applied along the way, as the
product or service become equivalent to the customers’ satisfaction.