Statistics and Risk
Management
Production
Performance Objective:
After completing this lesson, the student will understand the basic role of product
production including planning, scheduling, and quality control concepts.
Approximate Time:
When taught as written, this lesson should take 4-5 days to complete.
Specific Objectives:
 The student will discuss the importance of product production planning.
 The student will understand the type of scheduling and demands on
equipment and materials.
 The student will discuss the importance of quality control and quality
assurance.
 The student will review then methodologies that define Quality Control
Management (TQM)
This lesson corresponds with Unit 5 of the Statistics and Risk
Management Scope and Sequence.
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TEKS Correlations:
This lesson, as published, correlates to the following
TEKS for Regression. Any changes/alterations to
the activities may result in the elimination of any or
all of the TEKS listed.
130.169(C)(2)
(C) describe and explain the production role and function, including the
concept of production and production activities; and
(D) identify and implement quality-control processes in finance, including:
(i) quality-control measures;
(ii) quality-control methods at work;
(iii) crucial elements of a quality culture;
(iv) the role of management in achievement of quality; and
(v) efficient operating systems
InterdisciplinaryTEKS:
English:
110.31 (C) (21) (B)
… organize information gathered from multiple sources to create a variety of
graphics and forms (e.g., notes, learning logs)…
110.31 (C) (22) (B)
…evaluate the relevance of information to the topic and determine the reliability,
validity, and accuracy of sources (including Internet sources) by examining their
authority and objectivity…
110.31 (C) (23) (C)
… use graphics and illustrations to help explain concepts where appropriate…
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110.31 (C) (23) (D)
… use a variety of evaluative tools (e.g., self-made
rubrics, peer reviews, teacher and expert evaluations)
to examine the quality of the research…
Math:
111.36 (C) (4) (A)
… compare theoretical and empirical probability;
111.37. (C) (3) (B)
… use probabilities to make and justify decisions about risks in everyday
life
Occupational Correlation
(O*Net - http://www.onetonline.org/)
Quality Control Systems Manager 11-3051.01
Similar Job Titles: Statistical Analyst, Education Research Analyst,
Research Associate, Clinical Biostatistics Director, Clinical Statistics
Manager, Institutional Research Director, Program Research Specialist,
Research Analyst, Statistical Reporting Analyst
Tasks:
 Direct product testing activities throughout production cycles.
 Monitor performance of quality control systems to ensure effectiveness
and efficiency.
 Oversee workers including supervisors, inspectors, or laboratory workers
engaged in testing activities.
(Soft) Skills:
Deductive reasoning; Written comprehension; Problem sensitivity; Originality
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Instructional Aids:
1. Display for presentation, websites for
assignments and class discussion
2. Assignment Worksheets
3. Supporting Spreadsheets
Materials Needed:
1. Printer paper
2. Assignments and website information ready to distribute to
students.
Student projects will be displayed to increase interest in Statistics
Equipment Needed:
1. Computer with presentation and Internet Access
2. Computers for Students to Conduct Research and Collect Data
for Projects
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References:
Production Planning and Control
Understanding the planning, management, and control issues involved in
production.
http://www.du.ac.in/fileadmin/DU/Academics/course_material/EP_08.pdf
Total Quality Management (TQM)
This article addresses the seven important principles of Total Quality
Management and provides several additional links for other perspectives on
TQM along with a link to the sites blog on TQM.
http://managementhelp.org/quality/total-quality-management.htm
Quality Control and Quality Assurance
Through this site teachers can access a series of lesson plans and resources
that deal with quality control and quality assurance that they can use to
reinforce other lessons on these topics. Through these lessons students can
learn the importance of quality in modern business, demands for quality,
benefits and costs of maintaining quality standards and much more.
http://www.bized.co.uk/educators/1619/business/production/lesson/qualcontrol.htm
Operations Scheduling
Explain the different kinds of scheduling operations, describe different shop
loading methods, develop a schedule using priority rules, calculate scheduling
for multiple workstations, and develop a schedule performance measures.
www.csus.edu/indiv/b/blakeh/mgmt/.../OPM101Chapter15_000.ppt
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Teacher Preparation:
Teacher will:
1.
presentation, and
handouts.
2.
resources and websites.
3.
websites ready.
Review terms in outline,
Locate and evaluate various
Have assignments and
Learner Preparation:
It is time to wrap up what the students have learned about
statistics. You will briefly describe commercial software for
statistics with examples the student might find interesting. Then
the student will get to apply what they have learned to analyzing
data.
Introduction:
STUDENTS will watch the Unit video found here:
jukebox.esc13.net/untdeveloper/Videos/Production.mov
STUDENTS will take the practice test and review using the Key,
found in Common/Student Documents.
EXHIBIT:
Excitement for manufacturing process.
INTRODUCE: Much more goes on with the item you buy than
originally understood.
ASK:
Ask students to go through the steps of making a
snocone. Write steps on the board. Then,
decipher the areas where quality control is
needed.
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I.
Production Processes
A. Ideas
B. Concepts
C. Original Ideas
D. Copies of Products
E. Design, Drawings, Models,
Prototypes
F. Planning
G. Product Engineering
1. What to produce
H. Process Engineering
1. How to produce it
2. Manage bottlenecks
a. Planning, Inputs,
Outputs, Within Factory,
Next Factory, End Buyer,
Scheduling
b. Forward Scheduling is
planning the tasks from
the date resources
become available to
determine the shipping
date or the due date
c. Backward Scheduling is
planning the tasks from
the due date or requiredby date to determine the
start date and/or any
changes in capacity
required
d. Companies use forward
& backward scheduling
to:
• allocate plant and
machinery resources,
• plan human
resources,
• plan production
processes
• purchase materials
Use 15.1_
ProductionProcesses.pptx
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I.
Benefits of Scheduling
1. Process change-over
reduction
2. Inventory reduction,
leveling
3. Reduced scheduling
effort
4. Increased production
efficiency
5. Labor load leveling
6. Accurate delivery date
quotes
7. Real time information
8. Implementation, Set Up,
Materials, Equipment,
Routing, Production
Runs, Monitoring,
Adjustments
Provide Assignment sheets and discuss
and answer any questions about
assignment (In class or take homeInstructor’s Option)
II.
Production Quality Control
A. Quality Control emphasizes
testing of products to uncover
defects and reporting to
management who make the
decision to allow or deny
product release
B. Quality Assurance attempts to
improve and stabilize production
(and associated processes) to
avoid, or at least minimize,
issues which led to the defect(s)
in the first place.
C. Total Quality Management
(TQM)
1. Quality can and must be
managed.
2. Processes, not people, are the
problem.
3. Every employee is responsible
for quality.
4. Quality must be measurable.
Provided .docx files
15.1a_
ProductionProcesses.docx
Use 15.2_
ProductionQualityControl
.pptx
5. Quality improvements must be
continuous.
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D. Quality is a long-term
investment.
1. Capture Data at Each
Critical Production Process
2. Document
3. Flows
4. Process Issues
5. Inspections
6. Variances (sick employee,
machine broke down, etc.)
7. Rejects
8. Randomly Test Product
Samples
9. Pull products at all stages of the
process and inspect-test.
10. Document results
11. Document Issues
a. Identify Statistical
Significance of Issues
b. Identify Statistical Patterns
c. Gather Employee Thoughts
d. Gather User Experiences
12. Surveys
13. Phone/Email Follow-ups
14. Reviews (web)
15. Follow-Ups
16. Improvements
17. For contract work, particularly
work awarded by government
agencies, “quality control”
issues are among the top
reasons for not renewing a
contract
Provide Assignment sheets and discuss
and answer any questions about
assignment (In class or take homeInstructor’s Option)
Provided .docx files
15.2a_
ProductionQualityControl
.docx
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Guided Practice:
See assignments.
Independent Practice:
See assignments.
Review:
Question:
Describe how to follow up on
quality?
Question:
When do make the decision that
there is a quality control problem
in the process?
Informal Assessment:
Instructor should observe student discussion and monitor interaction.
Formal Assessment:
Completion of provided assignments using included keys for grading.
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Student Assignment
15.1a Production Process Key
Name: ____________________
You are the chief project engineer for a large defense contractor and
your firm has been awarded a contract to build a large component that
will be part of a weapons defense system. The component MUST be in
production (with quality control issues addressed) within 24 months.
You have set up a project management calendar that allots 6 month for
planning, 6 months to set up the plant and acquire materials contracts,
and 6 months to address training requirements, test production, and
address quality issues.
You are an expert in implementing both “Forward Scheduling” and
“Backward Scheduling”. Select one of these methodologies and
explain why you chose the scheduling you did.
There is no correct method….you just have to be able to justify the
reasons for your choice by describing your company, manufacturing
facilities (including capacity), expertise, and current production
schedules and contracts.
Answers will vary per student, but look that they have made an effort to
fulfill the requirements of this assignment any various levels. You may
ask yourself does this student demonstrate the ability to differentiate
between forward and backward scheduling.
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Student Assignment
15.2a Production Quality Control Key
Name: ____________________
Total Quality Management (TQM) might be considered more of a religion
than a simple management technique. What we mean by this is that in
your life there are many instances where TQM principles can be applied
to daily living situations.
From the TQM Presentation Slide (7 Concepts of TQM). Identify where
and how some of these concepts could be applied to family, friends,
school, & work. Be creative in your ideas. 
Answers will vary per student, but look that they have made an effort to
fulfill the requirements of this assignment any various levels. This can
be a real fun assignment! It gives the student a chance to talk about
themselves and may provide some funny stories that apply to some
efforts in their lives where QUALITY WAS AN ISSUE (home chores,
school work, dating, etc).
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Name:________________________________ Date:__________________
Class:_______________
Production Test
TRUE and FALSE:
1. Introducing new products into the market is as much of a risk management issue as it is a production issue.
A. True
B. False
2. In developing a product production plan, it is a good idea to look at the many risks and identify solutions to lessen the risk.
A. True
B. False
3. The supply chain does not involve the flow of the product from supplier to end user.
A. True
B. False
4. Gantt charts can be used for production planning.
A. True
B. False
5. Increased production efficiency is not a benefit of scheduling.
A. True
B. False
6. Every employee is responsible for the quality of the product.
A. True
B. False
MATCHING:
A.
B.
C.
D.
E.
Production Planning
Quality Control
Backward Scheduling
Total Quality Management
Benchmarking
7.
__________ Is the use of standard measurements in a service or industry for comparison to other organizations in order to
gain perspective on organizational performance.
8. __________ An approach that organizations use to improve their internal processes and increase customer satisfaction.
9. __________The development of a plan to meet demand for a product over a period of time involving the how, what, when
and where
10. __________ Planning the tasks from the due date or required-by date to determine the start date and/or any changes in
capacity required.
11. __________ Emphasizes testing of products to uncover defects and reporting to management who make the decision to
allow or deny product release.
MULTIPLE CHOICE:
12. Planning the tasks from the date resources become available to determine the shipping date or the due date is called
_____________.
A. Backward Scheduling
B. Production Planning
C. Forward Scheduling
D. Product Development
13. The order-at-a-time construction process is sometimes referred to as ____________.
A. Order Based Method
B. Sequential Loading
C. Both A and B
D. Neither A nor B
14. When documenting issues in quality control, steps include:
A. Only discuss with team members, not
B. Throw out defectives products on your
management
own
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C. Identify statistical significance of
issues
Name:________________________________
D. None of the above
Date:__________________ Class:_______________
15. Which of the following is a way companies use forward and backward scheduling:
A. Plan human resources
B. Plan production processes
C. Purchase materials
D. All of the above
16. When Total Quality Management is implemented correctly, it can lead to:
A. Decreased costs for preventative
B. Better overall performance
measures
C. An increase of loyal customers
D. All of the above
17. Which of the following is a way to gather user experiences of a product?
A. Surveys
B. Phone/Email Follow-ups
C. Web Reviews
D. All of the above
18. Attempts to improve and stabilize production (and associated processes) to avoid, or at least minimize, issues which led to
the defect in the first place.
A. Benchmarking
B. Quality Assurance
C. Scheduling
D. Quality Control
19. Accurate delivery date quotes is a benefit of __________.
A. Scheduling
B. Quality Control
C. Quality Assurance
D. Product Development
20. ___________ is a quality management initiative that takes a data-driven approach to eliminating defects with aim to reach
six standard deviations from the desired target of quality.
A. Six Sigma
B. Forward Scheduling
C. Quality Assurance
D. Quality Management
21. For contract work, particularly work awarded by government agencies, “_________” issues are among the top reasons for
not renewing a contract.
A. Six Sigma
B. Quality Control
C. Quality Assurance
D. Quality Management
22. Which of the following is an important principle of Total Quality Management?
A. Processes, not people are the problem
B. Quality must be measureable
C. Quality is a long term investment
D. All of the above
23. Increased production efficiency, real time information and inventory reduction are benefits of?
A. Quality Control
B. Scheduling
C. Quality Assurance
D. Quality Management
24. Which of the following would you want to document in production planning?
A. Inspections
B. Phone calls
C. Talks with management
D. None of the above
25. Drawings, models and prototypes are examples of what?
A. Concept Ideas
B. Design Ideas
C. Production
D. Inspection
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Production Test Key
1. A
2. A
3. B
4. A
5. B
6. A
7. E
8. D
9. A
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
C
B
C
C
C
D
D
D
B
A
A
B
D
B
A
B
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