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Operation Management Simulation: Quality Analytics MBA 513 – Barinder Mangat, Rushabh Vedia The purpose of this simulation is to help us understand about managing quality in different settings through analytics related to statistical process control, process capability, and the cost of quality. There are two kind of defects  Internal Defects They are also known as In-house defects. These defects occur when internally there are issues of scraps or when there is rework to be done. Higher scraps leads to higher wastages and could lead to underutilization of resources. Rework or repairs increases the lead time or cycle time since the flow of production is disrupted.  External Defects Many goods that are returned due to lower quality or some sort of damage ads to the inventory and rework areas thereby increasing the costs. Customers feedback is crucial as any changes in the goods to be made can be done at the production line. Simulation Learning  Managing Control Limit  Using Control Limit to Control Process  Analysing the Control Charts  Making managerial investments to minimize the total cost of quality In the 1st challenge - On each simulation run a random sample is collected from the batch and the mean(X-bar) and range(R-chart) are calculated. We could observe the fluctuations in the data which helped us understand how to calculate the control limits. In the 2nd challenge - Whenever we have processes that are out of control we can either change the labour or recalibrate the equipment or do both. There was cost associated with every option that was selected. Thus there should exists a balance between the labours employed and the machines that are running /installed, only then there would be a lower cost in conducting the processes. In the 3rd challenge - Process capability index (CPK) is the measure of process capability and it helps understand and calculate the capability index and the process which ought to be implemented under the limits. In the 4th Challenge - Factors such as investment in labour training and equipment are necessary to reduce the costs. Higher investment in equipment and no investment in labour training hours would still have multiple defects in the production. Labour training investment kept at $1250 and equipment investment of $4000 or higher along with sample size of 5 to $5.50, there will be a reduction in the total cost of quality up to $8.4K which includes 0 defects.