PMP Preparation Course, Chapter 8

December 08

Quality Systems and Gurus

For the PMP Exam you need to know the paradigms and absolutes of the main quality systems and gurus:

1. 2. 3. 4. 5.

ISO TQM Deming Crosby Juran

Source: Adapted from Three Paths, One Journey, Steve GibbonsThe Principal Financial Group, Journal for Quality and Participation (October/November 1994); articles by Armand V. Feigenbaum in Journal for Quality and Participation (1988 1996).
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W. Edwards Deming
Quality is continuous improvement through reduced variation. Demings Five Principles: 1. The central problem is the failure of management to understand variation. 2. It is managements responsibility to know whether the problems are in the system or in the behavior of the people. 3. Teamwork should be based on knowledge, design, redesign. Constant improvement is managements responsibility. 4. Train people until they are achieving as much as they can. 5. It is managements responsibility to give detailed specifications.
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PMP Preparation Course, Chapter 8

December 08

Philip B. Crosby
Quality is conformance to requirements
The Four Absolutes of Quality Management: 1. The definition of quality is conformance to requirements. 2. The system of quality is prevention. 3. The performance standard is zero defects. 4. The measurement of quality is the price of nonconformance.

Joseph M. Juran
Quality is fitness for use The Quality Trilogy: 1. Quality improvement. 2. Quality planning. 3. Quality control.

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PMP Preparation Course, Chapter 8

December 08

Cost of Quality
There are 3 types of costs that are incurred: prevention costs, appraisal costs, and failure costs (internal and external).
Cost of Quality

Cost of Conformance

Cost of Non-conformance

Prevention Cost

Appraisal Cost

Internal Failure

External Failure
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The Cost of Quality Before & After TQM

Savings 50% of total in 3 years

Failure Costs 75%

Before

After
Failure Costs

Appraisal Costs 23% Prevention Costs 2% maximum

Appraisal Costs 10 15%

Prevention Costs 10 15%

Costs of Poor Quality

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PMP Preparation Course, Chapter 8

December 08

Marginal Analysis
When considering the cost of quality, marginal analysis help to define the point where incremental revenue from quality improvement equals the incremental cost to secure it.

Control Limits and Specification Limits

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PMP Preparation Course, Chapter 8

December 08

Interpreting Patterns in Control Charts

Pareto Chart
A Pareto chart is a specific type of histogram, ordered by frequency of occurrence, which shows how many defects were generated by type or category of identified cause. The Pareto technique is used primarily to identify and evaluate nonconformities and guide corrective action.
Paretos Law A relatively small number of causes will typically produce a large majority of the problems or defects (80/20 rule)
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PMP Preparation Course, Chapter 8

December 08

Pareto Chart Example

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Pareto Chart in the Exam

How does the exam refers to Pareto Chart ? 1. Helps focus attention on the most critical issues 2. Prioritize the potential causes of the problem 3. Separate the critical few from the uncritical many

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PMP Preparation Course, Chapter 8

December 08

Basic Statistical Definitions

Mean () Average, sometimes ( x ) is used Variance Sum of squared differences between mean and each value, (x- )2, divided by number of samples less one (n-1) Standard deviation Square root of the variance

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Example of Standard Deviation

Item 1 2 3 4 5 6 7 8 9 Total Weight (x) 4.9 5.0 5.1 5.2 5.3 5.5 4.7 4.8 5.1 45.6 (x-)2 0.02778 0.00444 0.00111 0.01778 0.05444 0.18778 0.13444 0.07111 0.00111 0.50000
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PMP Preparation Course, Chapter 8

December 08

Example of Standard Deviation

Mean () = 45.6 / 9 = 5.066; (rounded to 5.07) Variance Sum of squared differences between mean and each value, (x- )2, divided by number of samples less one or (9-1=8); thus 0.5 / 8 = 0.0625 Standard deviation Square root of the variance; thus 0.0625 = 0.25

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Using Standard Deviation

2 standard deviations (+/- 1) = 68.26 % 4 standard deviations (+/- 2) = 95.46 % 6 standard deviations (+/- 3) = 99.73 %

These figures need to be memorized for the exam

-3

-2

-1

+1

+2

+3
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PMP Preparation Course, Chapter 8

December 08

Summary
Review Questions

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