Operations Management Simulation:

QUALITY ANALYTICS

by Barbara Flynn, Indiana University

FOR COURSES IN:

Operations
Quality

Management

Management

Statistical Process Control

Operations Management Simulation: Quality Analytics

In this single-player simulation, students learn
how to manage quality in service, health care, and
manufacturing settings through the use of analytics
related to statistical process control (SPC), process
capability, and the cost of quality. Students play 4

different challenges that ask them to calculate control

limits, use control limits in real time to maintain control of
a process, analyze control charts post hoc to determine
whether a process is capable, and make managerial investments in preventive measures.

Students experiment with managerial decisions around process improvement to bring down the total cost of quality.

TEACHING THE SIMULATION

In order to play the simulation,
students are expected to have basic
knowledge about the purpose of
control charts, calculation of control
limits for X-bar and R charts, inter-

hbsp.harvard.edu

pretation of control charts, and

process capability. This simulation is
appropriate for business undergraduate
and MBA students who are taking an
introductory operations management

course or more advanced courses in

quality management, Six Sigma, or SPC.
It is appropriate as a mastery exercise
after students have completed a module
on quality management or SPC.

THE 4 CHALLENGES
The simulation presents 4 separate
challenges that illustrate key concepts
in quality control.

 sing sample statistics, Challenge 1

U
asks students to calculate control
limits for X-bar and R charts in a
generic manufacturing setting.
In Challenge 2, students use the
control limits from Challenge 1 to
inform decisions about machine
recalibrations and labor swaps to
keep the process in control while
minimizing cost.
In Challenge 3, students are provided with 4 separate histograms
(each for a different industry)
with the means of all samples
over a period of time and must
determine whether each process
is capable of producing to
specifications.

Students use X-bar and R charts to analyze a process in real time.

In Challenge 4, students make

investment decisions related to
prevention and appraisal in order to
minimize the total cost of quality.

CONTROL CHARTS
The simulation uses control charts
to illustrate a variety of lessons
related to process control and
process capability. Key learning
objectives include balancing the
costs of internal and external failures
with the costs of bringing a process
back into control, and understanding
the difference between control limits
and specification limits and how
they work together to determine
the capability of a process.

Challenge 3 helps students understand the difference between control limits and
specification limits.

COST OF QUALITY
In addition to covering process control, the simulation teaches valuable lessons
about process improvements. In Challenge 4, students experiment with investments in prevention and appraisal to reduce internal and external failures. This
challenge demonstrates how managerial investments in process improvement
while initially expensivecan ultimately lower the total cost of quality by reducing
costly defects.

ADMINISTRATION TOOLS ON NEXT PAGE

Administration Tools for Faculty

A comprehensive Teaching Note covers

key learning objectives, including:

 he relationship between internal

T
failure costs, external failure costs,
appraisal costs, and prevention
costs and how they contribute
to the total cost of quality
 ow to use SPC in real time to
H
make go/no go decisions about a
process, 1 sample at a time
 he difference between a process
T
that is in control and a process
that is capable, through post hoc
analysis of a control chart
 ow managerial decisions about
H
cost play out in the trade-off
between cost and defect rate

Aggregated class results for Challenge 4 illustrate the classic Cost of Quality curve.

VIEWING SIMULATION RESULTS

FACULTY DEBRIEF SLIDES

Faculty have full and immediate

access to the student results for
Challenges 2, 3, and 4 via the Class
Summary/Overview page. A graphical
illustration of Challenge 4 results is
also available.

Instructors have access to a

PowerPoint template presenting
specific topics for simulation debrief.

Product #4404 | Single-player | Seat Time: 60 minutes | Developed in partnership with Forio Online Simulations

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entire simulation and is available to
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ALSO AVAILABLE

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Benihana V2 #7003

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Process Analysis #3291

Premium Educator access is a free

service for faculty at degree-granting

MC184620314

 ow managerial decisions about

H
quality control, including monitoring a process with SPC and making
quality improvement investments,
affect product yields and costs

Product #M13865

 review of essential calculations

A
in SPC, including control limits and
process capability index

Printed on recycled paper.