Critical Thinking Activity – Selecting Improvement Subjects Using Pareto Charts and Stratification on page 269

Complete the Critical Thinking Activity based on the requirements listed in Homework Problems under Introduction & Resources in Modules.

Once you open the book table of contents, select Part Two Tools and Techniques, then Chapter 15 Overview of Total Quality Tools, then Critical Thinking Activities on page 268; here you will find all three Homework activities. Build the relevant graph, chart, etc then write one page answering the questions.

Your paper should be 1 full written page PLUS your graph, chart, etc. (not including your title page and reference page) submitted in APA format. I posted a template in the Files section.

1. Starlight Homes Inc. is a building contractor specializing in upscale homes in the Southwest. Before each new home is sold, Starlight conducts a final inspection of the home and repairs any defects. In addition, Starlight receives a “punch list” of defects (to be corrected) compiled by the buyers following the sale. Ricardo Alvarez, Starlight’s lead supervisor, has concluded that even if it should cost more to do the work right in the first place, it will be a lot cheaper than going back later to fix the defects. In an effort to reduce costs, improve the quality of Starlight’s homes, and reduce the number of complaints after the sale, Ricardo has assembled data from his final inspections and the punch lists for the last 20 homes sold. These data are listed in the following chart:
   

   Defect Type	Occurrences	Defect Type	Occurrences
   Damaged walls	13	Doors	14
   Exterior paint	5	HVAC	11
   Plumbing	33	Roof	3
   Caulking	28	Masonry	2
   Electrical	25	Interior paint	61
   Cabinetry	12	Landscaping	16
   Woodwork	46	Fixtures	7

   Construct a Pareto chart to illustrate the defect types by number of defects. Which two defect types appear to be the most significant? Should Ricardo focus his attention on these two categories of defects? Ricardo decided to stratify the Pareto chart by cost before making any decision. His bookkeeper developed the average cost per repair event per category. The data are shown here:

   Average Cost per Repair Event
   Defect Type	Average Cost	Defect Type	Average Cost
   Damaged walls	$126	Doors	$11
   Exterior paint	25	HVAC	110
   Plumbing	78	Roof	72
   Caulking	7	Masonry	290
   Electrical	74	Interior paint	4
   Cabinetry	88	Landscaping	34
   Woodwork	5	Fixtures	31

   The second-level chart developed from these numbers should show Ricardo which two or three defect types are the most significant in terms of cost, enabling him to put his efforts where they will do the most good. What are they? Was Ricardo justified in going to the second level (of stratification) before making a decision on where to focus his efforts? Why?