Managers find customer-profitability analysis useful because it frequently highlights how vital a small set of customers is to total profitability. Managers find customer-profitability analysis useful because, when a customer is ranked in the loss category, they can focus on ways to make future business with this customer more profitable. All of the above are true statements. Quality of design measures how closely the characteristics of products or services match the needs and wants of customers. Conformance quality a. measures the same things.
Poor quality is more costly at a bottleneck work station than it is at a nonbottleneck work station.
The cost of poor quality at a bottleneck work station is the cost of materials in waiting. Throughput contribution increases only by increasing bottleneck output. Throughput contribution is not increased when nonbottleneck output is increased. The cost of poor quality at a nonbottleneck opera- tion is the cost of materials wasted. Increasing idle time at the bottleneck operation helps relieve the delays at the nonbottleneck operations.