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W14_IQB_Theories of Motivation

I was in a Leadership workshop when I found out that there are theories of motivation which I never heard before until I found them in the pre exam pass by my mentor. There are many theories regarding how to motivate others but the most prominent theories are:

  • X and Y theory
  • 2 Factor theory
  • Equity Theory
  • Expectancy theory
  • Goal Setting theory

X and Y Theory

This theory was proposed in early 60’s by Douglas McGregor, an American social psychologist, from his book “The Human Side of Enterprise”. McGregor suggest that there are 2 style in managing people, using “authoritarian style” or known as X theory which the management will use power to direct his/her subordinate to achieve the organization’s goals. He/she will give a detail direction what and how to do things. It will result in an un-ambitious, lack of responsibility subordinate. All responsibility will be under the manager. No sense of belongings to the result of the work from the subordinate.

The other style is “participative management” or known as Y theory, which the management allows his/her subordinates to express their ideas, self directed and self control. The management will only give a general objectives and timeline/duration. The subordinates will be responsible to achieve the objectives.

Those 2 (X and Y) theories are well-matched to certain conditions/level of organization. When we face the situation where the subordinates is the lowest level of organization with inadequate knowledge and capability, then use the X theory, give them detail direction and closely monitor the progress. But for the medium level of organization where the knowledge and capability were adequate, then use the Y theory, give them the objectives and general direction and let them solve it.

2 Factors Theory

 Herzberg shares his theory about the cause of employee’s satisfaction and dissatisfaction. In his theory, he explains that there are 2 factors which influence employee’s motivation. They are motivation and hygiene. Motivation factor is the factor that the absence of this factor will not result in dissatisfaction of the employee but when this factor provided by the company, it will heighten the employee’s motivation. This factor included status, recognition, bonuses, promotion etc.

And not in the opposite of the motivation factor but different factor that gives effect to employee’s motivation is hygiene factor. Hygiene factor is factor that the absence of this factor will result in dissatisfaction of the employee but when this factor provided by the company there will be no change to their motivation since this is the basic needs. This factor includes wages, salary, security of works, quality of inter personnel relations etc.

Equity Theory

This theory was presented by John Stacey Adam in 1963, it said that people will be highly motivated when he receive fairly and equally treatment in every aspects of his life. There are 3 elements in equity theory, they are: 1. Input, are every aspect that given by the worker such as effort, skills, commitment, and hard work etc, 2. Outcomes, are every aspects that the worker thought that those are his rewards such as payment, salary, wages, and promotion etc, 3. Comparison person, is individual whose worker compare his ratio to. 

 The equity theory is dependant to comparison between an individual ratio of reward/investment (input/outcomes) to ratio by other (Comparison Person) in similar condition. He/she will naturally compare his/her ratio to other ratio which any inequity due to comparison will result in disappointment worker.  

Expectancy Theory

This theory was brought by Victor H. Vroom in 1964, it said that an individual tend to motivated when he knows that in the end there is something he can expected to become. This theory is based on 3 aspects, they are: 1. Expectancy, is perception that the current effort will lead to good performance, 2. Instrumentality, is perception that the performance will lead to reward, 3. Valence, is the expected value will be received.

 

Conclusion

From the above theories, we can conclude that every theory has similarities to each other. There are many ways to encourage the worker but all theory emphasize that reward id the easiest way to motivate the worker.

Bibliography

Scholl, Richard W., “Motivation: Expectancy Theory”, 2002. Retrieved from http://www.uri.edu/research/lrc/scholl/webnotes/Motivation_Expectancy.htm

Kurniawan, Arifianto, “Theory : 2 Factor, Expectancy, Equity”, retrieved from http://www.scribd.com/doc/54889324/Case-Study-2-Factor-Expectancy-Equity-Theory

“Douglas McGregor: theory x y” retrieved from http://www.businessballs.com/mcgregor.htm

“Motivation in theory – Herzberg two factor theory” retrieved from http://tutor2u.net/business/people/motivation_theory_herzberg.asp

“Equity Theory on Job Motivation” retrieved from http://www.businessballs.com/adamsequitytheory.htm

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W13_IQB_TQM and Quality Gurus

I have no answer when mentor gave me question about Deming, Juran and Crosby. This is what I summarize about them and their legacy to Total Quality Management in order to answer and raise my odds to pass the AACE certification.

Total Quality Management is method to manage the quality by continually improve the process and produce the product exceed the customer’s expectations. The improvement shall implemented by every level in the organizations and the management shall be the role model in this process. Total Quality Management offer the concept of strong focus in process measurement and control as means of continuous improvement.

This concept were develop from a long experience and dedication from individuals which known as “Quality Gurus”. There are three (3) well known among them.

1. Deming: W. Edwards Deming was famous in Japan in years after WWII since he assisted many Japanese Company in improving their Quality. The Japanese establish The Deming Prize, for the most improving Firms in quality aspect, to show their respects to this NYU professor back in 40’s. His legacy in quality management is the 14 points in quality improvement. They are:

  1. Create constancy of purpose toward improvement of product and service.
  2. Adopt the new philosophy.
  3. Cease dependence on inspection to achieve quality
  4. End the practice of awarding business on the basis of a price tag.
  5. Improve constantly and forever the system of production and service.
  6. Institute training on the job.
  7. Institute modern methods of supervision and leadership
  8. Drive out fear.
  9. Break down barriers between departments.
  10. Eliminate numerical goals for the work force.
  11. Eliminate work standards and numerical quotas
  12. Remove barriers to pride of workmanship
  13. Institute a vigorous program of education and training for everyone
  14. Create a structure in top management that will push everyday on the above 13 points.

Deming also introduce the “a vs. b” philosophy, said:

  1. When organization focus primarily on quality then the quality tends to increase and cost on the contrary.
  2. When organization focus primarily on cost then the quality will decline and conversely cost will raise

2. Juran: Joseph M. Juran was known in the 50’s era after publishing his book “Quality Control Handbook”. With his definition of quality as fitness for use, he said that quality is not always about conformity to specifications but also knowing what the customer intention in using the products. Juran also known for his Quality Trilogy: Quality Planning, Quality Control, and Quality Improvement.

3. Crosby: Philip B. Crosby’s concept is Zero Defect. This concept stated that no amount of defect shall take into account. Crosby snubbed the idea to allow minor defects in a process. He emphasized to prevent any possibility of defects. With his book “Quality is free”, he promotes his concept that quality is quantifiable. Cost of quality such as waste of labor, scrap, lost sales, even organizational cost are costs that should be prevented in order to improve quality.

Similarity from these 3 gurus is that the role of management and use of statistical control tools are the key factors to achieve the definition of Quality “Meet and Deliver the Customer’s Expectation”.

Here I attach the comparison between these 3 gurus which I retrieve from my partner blog, Ramzi Quzwain, and zulqarnain.us/files/tqmphilosophies.doc.

Bibliography:

Total Quality Management retrieved from http://www.wiley.com/college/sc/reid/chap5.pdf

Shyam, Radhey. and yadavrsyadav@gmail.com, Total Quality Management, retrieved from http://www.scribd.com/doc/38331105/2/The-Crosby-philosophy

Total Quality Management (TQM)  retrieved from http://managementhelp.org/quality/total-quality-management.htm

Zulkarnain, tqmphilosopies retrieved from zulqarnain.us/files/tqmphilosophies.doc

Disraeli, Benjamin, Deming’s 14 Points for Management, 1987, retrieved from http://www.stat.auckland.ac.nz/~mullins/quality/Deming.pdf

W12_IQB_Predict Steel Price (part.1)

Problem Statement

On Week 11 I’ve posted a blog which talk about how to predict future price of steel Hot Rolled Coil (HRC) using data from 1997 to 2008. One comment from PDG suggest me to use Control Chart to see whether the data is out control or not instead use it as an indicator graph to justify the regression result. This blog will mend that approach by using control chart as it should be and analyze the data not only linear regression but also other regression models with the purpose of achieving R2 closest to 1.

Run the Alternatives Methodology

  1. Use Control Chart to taken out the outliers.
  2. Use multiple regression models such as exponential, polynomial etc to achieve the highest R2

Criteria Selection

The highest R2 will be use to do the prediction

Analysis

 

From the above graph we can say that the data is still in control because no data going further than sigma +3 and sigma -2.

The next is to analyze them using regression analysis

The closest R2 to 1 were achieving when using Polynomial 6th order. It has R2 = 0.8457.

The evaluation based on the above result is:

  1. Best Case scenario would be when the price is increasing slowly in long period (R2 = 0.6905)
  2. The most likely scenario would be when the price increasing a bit higher than the expected/best case scenario (R2=0.6885)
  3. The worst case scenario is when the price increasing steeply (R2 = 0.8457)
  4. The result from polynomial 4th and 5th order is most likely not going to happen since the price always above the average price since 2004 and never going down.

Post Evaluation and Monitoring

In the next blog, I will use the above result to predict future price of HRC steel.

Bibliography

Sullivan, W.G., Wicks, E. M., & Koelling, C. P. (2011). Engineering Economy, (p.89-p.93).

1997 -2008 US Steel Prices – Monthly – End of Month retrieved from http://www.econstats.com/rt_steel.htm

NORTH AMERICAN CARBON STEEL PRICES – WITH INDIVIDUAL PRODUCT FORECASTS retrieved from http://www.meps.co.uk/N.Amer%20Price.htm

Eng, Kimberly (2011). How to Create a Control Chart retrieved from http://www.wikihow.com/Create-a-Control-Chart

Forecasting with Trend Lines using Excel retrieved from http://jcflowers1.iweb.bsu.edu/rlo/trendlines.htm

W11_IQB_Predict Steel Prices

 

Problem Recognition

I would like to know the prediction of the steel prices using Regression and see the deviation using SPC in excel 2007. The input data will using data from North America Steel Price from 1997 to 2008 and compare the prediction for year 2009 to 2011 and compare them with the historical price from the same year.

Run the alternatives Methodologies

To obtain the mathematical value for the predicted price I will use Regression method.

Criteria Selection

The result should be not exceed the sigma+3 or Sigma from the control chart

Analysis

Input Data taken from North America HRC historical price (1997-2008) 

From the above data, the regression result and its predicted graph is shown below

 

 

And the predicted price should be 

Price = 16,23 x – 31947

Evaluation of Selected Result

I will evaluate the result by compare it with 2 approaches

  1. Predicted price vs Actual Price (historical)

As we can see that the deviation is very close, in 2009 and 2010 the price was about same but for year 2011 we shall add 6% to predicted price.

 2. Using Control Chart

 

 The graph shows that the predicted prices still in good correlation to historical price.

 Conclusion

The price value, Price = 16,23 x – 31947, can be considered to predict future price of steel. Adding up price with 1% to 6% will raise the estimation confidence level.

 Bibliography

Sullivan, W.G., Wicks, E. M., & Koelling, C. P. (2011). Engineering Economy, (p.89-p.93).

1997 -2008 US Steel Prices – Monthly – End of Month retrieved from http://www.econstats.com/rt_steel.htm

NORTH AMERICAN CARBON STEEL PRICES – WITH INDIVIDUAL PRODUCT FORECASTS retrieved from http://www.meps.co.uk/N.Amer%20Price.htm

Eng, Kimberly (2011). How to Create a Control Chart retrieved from http://www.wikihow.com/Create-a-Control-Chart

W10_IQB_Estimate Gas Turbine Price Using CER

Problem Statement

I need to estimate gas compressor price but what I have now only historical data from vendors. Commonly, price of gas compressor is related to its Hp Output.

What is the formula I should use to estimate 21000 hp gas compressor?

Feasible Alternatives

The method is using Cost Estimating Relationship (CER) from Engineering Economics p.89

Criteria Selection

Using the CER method, the result should show the equation for every hp output of gas compressor.

Analysis and Comparison of criteria

The data from vendors is shown in the below table. The prices already multiplied by factors.

Using the example from engineering Economics p.91-92 the result would be

Selection of the preferred methodology

From the analysis we can conclude that the gas compressor price equation should be

Cost = 3.4407 + .00019x (in million USD)

x = hp Output

Conclusion and Monitoring

I will compare the price using the equation to contractual price from manufacturer and see what the range of different from those prices.

 

Bibliography

Sullivan, W.G., Wicks, E. M., & Koelling, C. P. (2011). Engineering Economy, (p.89-p.93).