Define Total Quality Management.

Total Quality Management is an approach in which every employee takes responsibility for quality, with the aim of getting the product right first time throughout the organisation.

How does quality assurance reduce a firm's costs?

Fewer defective units are produced, so less material and labour are wasted and there are fewer returns, repairs and warranty claims.

What is meant by getting it right first time?

It means designing the process so that the product meets the standard at every stage, rather than correcting faults after they occur.

Why does Total Quality Management require a change in corporate culture?

Responsibility for quality moves from an inspection department to every worker, which only works if staff are trained, trusted and willing to halt production.

Edexcel A-Level Economics B 9EB0

Scarcity, Choice and Potential Conflicts

Topic overview Scarcity and the economic problem Choice, trade-offs and opportunity cost Profit maximisation, sales maximisation and satisficing Survival, market share and other business objectives Stakeholders and their objectives Stakeholder conflicts and corporate social responsibility

Enterprise, Business and the Economy

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Introducing the Market

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The Role of Credit in the Economy

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Revenue, Costs, Profits and Cash

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Productive Efficiency

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Market Power and Market Failure

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Market Failure Across the Economy

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Macroeconomic Policies and Impact on Firms and Individuals

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Productive Efficiency

Quality control, quality assurance and Total Quality Management

3 things to know
Papers 2 and 3

Overview

Quality control against quality assurance, Total Quality Management and the culture change and costs it needs, end-of-line inspection, getting it right first time, quality and revenue, quality circles, accredited standards, quality in the digital economy, recall costs, demand, niche markets, and minimum quality for low-price firms.

What you need to know

Answer each one before you reveal it.

Your recallNot started

Key term

Why does a firm competing on low price still need a minimum standard of quality?

Key term

Distinguish between quality control and quality assurance.

Evaluation

What is the main weakness of relying on inspection at the end of the production line?

Questions from this subtopic

Each one with the model answer underneath.

1
Distinguish between quality control and quality assurance.
Model answer
Quality control inspects output at the end of the process to remove defective items, while quality assurance builds checks into every stage so that defects are not produced in the first place.
2
Define Total Quality Management.
Model answer
Total Quality Management is an approach in which every employee takes responsibility for quality, with the aim of getting the product right first time throughout the organisation.
3
What is the main weakness of relying on inspection at the end of the production line?
Model answer
Defective items have already consumed materials and labour by the time they are found, so the cost of the fault is incurred whether or not the item is sold.
4
How does quality assurance reduce a firm's costs?
Model answer
Fewer defective units are produced, so less material and labour are wasted and there are fewer returns, repairs and warranty claims.
5
What is meant by getting it right first time?
Model answer
It means designing the process so that the product meets the standard at every stage, rather than correcting faults after they occur.
6
Why does Total Quality Management require a change in corporate culture?
Model answer
Responsibility for quality moves from an inspection department to every worker, which only works if staff are trained, trusted and willing to halt production.

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