Question 1

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

Accepted Answer

Answer may vary
Feedback:
1. A control c

Question 2

ISO certification is a key component of a firm's efforts to improve quality and compete successfully.
Required: What must an organization demonstrate, in terms of its operating processes, in order to become ISO-9000 certified?

Accepted Answer

Answer may vary
Feedback: In order to be

Question 3

Which of the following is not true regarding the determination of relevant costs and relevant revenues associated with quality-related initiatives (such as the move to JIT production)?

Accepted Answer

A) Relevant costs are defined as future costs that differ between and among decision alternatives. 
B) Relevant costs exclude opportunity costs since these costs are not normally recorded by accounting systems. 
C) Relevant costs include all "avoidable" costs. 
D) Long-term effects of relevant costs and relevant revenues are usually assessed using discounted cash flow (DCF) capital budgeting decision models. 
E) Relevant revenues could include the contribution margin associated with increased sales (because of decreased cycle times associated with JIT). 
A) Relevant costs are defined as future costs that differ between and among decision alternatives. 
B) Relevant costs exclude opportunity costs since these costs are not normally recorded by accounting systems. 
C) Relevant costs include all "avoidable" costs. 
D) Long-term effects of relevant costs and relevant revenues are usually assessed using discounted cash flow (DCF) capital budgeting decision models. 
E) Relevant revenues could include the contribution margin associated with increased sales (because of decreased cycle times associated with JIT).

Question 4

A graphical representation of frequency of occurrence of the factors contributing to an indicated quality problem, ordered from the most to the least frequent, is a(n):

Accepted Answer

A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Ishikawa diagram. 
E) Cause-and-effect diagram. 
A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Ishikawa diagram. 
E) Cause-and-effect diagram.

Question 5

What is the amount of the estimated loss, L(x), using a Taguchi loss function, when the actual quality characteristic, x, is 0.405?

Accepted Answer

A) $25. 
B) $5,000. 
C) $10,000. 
D) $400,000. 
E) $405,000. 
A) $25. 
B) $5,000. 
C) $10,000. 
D) $400,000. 
E) $405,000.

Question 6

Kray Co. manufactures high quality knives for use in the meat processing industry, and operates in an industry which values and rewards consistent production quality. Technical innovation over the past decade has given the industry a good supply of high quality steel in raw material form. Kray Co. recognizes the need to establish and maintain strong quality controls for labor activities. A company quality team has asked you to assist the company in recommending either a goalpost conformance quality plan or an absolute quality conformance plan to monitor its manufacturing activities.
Required:
1. Briefly distinguish between the two approaches to ensuring conformance with production standards.
2. Explain how the Taguchi Quality Loss Function operates within the absolute quality conformance plan.3. Do you think worker reaction to the two plans in Part (1) above might be different? Why or why not?

Accepted Answer

Answer may vary
Feedback:
1. Goalpost co

Question 7

ISO 14000:

Accepted Answer

A) Provides a set of quality standards that relate to environmental management. 
B) Is required under current International Financial Reporting Standards (IFRS). 
C) Is a requirement for receipt of the Baldrige Quality Award in the U.S. 
D) Provides general standards for quality assurance by companies and organizations. 
E) Deals with quality-control principles as applied to government and not-for-profit organizations. 
A) Provides a set of quality standards that relate to environmental management. 
B) Is required under current International Financial Reporting Standards (IFRS). 
C) Is a requirement for receipt of the Baldrige Quality Award in the U.S. 
D) Provides general standards for quality assurance by companies and organizations. 
E) Deals with quality-control principles as applied to government and not-for-profit organizations.

Question 8

A graph that depicts successive observations of an operation taken at constant intervals is a(n):

Accepted Answer

A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Ishikawa diagram. 
E) Cause-and-effect diagram. 
A) Control chart. 
B) Pareto diagram. 
C) Histogram. 
D) Ishikawa diagram. 
E) Cause-and-effect diagram.

Question 9

In 2013 a manufacturing company instituted a Total Quality Management (TQM) program and one year later produced the report shown below:   On the basis of the above report, which one of the following statements is most likely correct?

Accepted Answer

A) An increase in conformance costs resulted in a higher-quality product, and therefore, resulted in a decrease in non-conformance costs. 
B) An increase in inspection costs was solely responsible for the decrease in total quality costs. 
C) Quality costs such as scrap and rework decreased by 48 percent. 
D) Quality costs such as returns and repairs under warranty decreased by 40 percent. 
E) Non-conformance costs increased by 50 percent and conformance costs decreased by approximately 47 percent. 
A) An increase in conformance costs resulted in a higher-quality product, and therefore, resulted in a decrease in non-conformance costs. 
B) An increase in inspection costs was solely responsible for the decrease in total quality costs. 
C) Quality costs such as scrap and rework decreased by 48 percent. 
D) Quality costs such as returns and repairs under warranty decreased by 40 percent. 
E) Non-conformance costs increased by 50 percent and conformance costs decreased by approximately 47 percent.

Question 10

For Hanson, what is the value of k, the cost coefficient in the Taguchi Loss Function?

Accepted Answer

A) $5. 
B) $2,000. 
C) $80,000. 
D) $1,600,000. 
E) $3,200,000. 
A) $5. 
B) $2,000. 
C) $80,000. 
D) $1,600,000. 
E) $3,200,000.

Question 11

What is the current 2012 total Cost of Quality (COQ)?

Accepted Answer

A) $400,000. 
B) $1,600,000. 
C) $2,400,000. 
D) $2,800,000. 
E) $5,200,000. 
A) $400,000. 
B) $1,600,000. 
C) $2,400,000. 
D) $2,800,000. 
E) $5,200,000.

Question 12

A quality circle:

Accepted Answer

A) Is a large group of employees from the same work area who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems. 
B) Does not implement and monitor solutions to the problems. 
C) Is a small group of employees from the same work area who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems. 
D) Is a small group of employees from different work areas who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems. 
E) Does not meet regularly. 
A) Is a large group of employees from the same work area who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems. 
B) Does not implement and monitor solutions to the problems. 
C) Is a small group of employees from the same work area who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems. 
D) Is a small group of employees from different work areas who meet regularly to identify and solve work-related problems and to implement and monitor solutions to these problems. 
E) Does not meet regularly.

Question 13

Within a Cost-of-Quality (COQ) system, product liability resulting from a legal action is classified as a(n):

Accepted Answer

A) Internal failure cost. 
B) External failure cost. 
C) Legal cost. 
D) Administrative expense. 
E) Manufacturing overhead cost. 
A) Internal failure cost. 
B) External failure cost. 
C) Legal cost. 
D) Administrative expense. 
E) Manufacturing overhead cost.

Question 14

All of the following costs are generally included in a Cost-of-Quality (COQ) report except:

Accepted Answer

A) Warranty claims. 
B) Forgone contribution margin on lost sales. 
C) The cost of making sales calls. 
D) Design re-engineering costs. 
E) The cost of implementing a statistical process control (SP
C)  system. 
A) Warranty claims. 
B) Forgone contribution margin on lost sales. 
C) The cost of making sales calls. 
D) Design re-engineering costs. 
E) The cost of implementing a statistical process control (SP
C)  system.

Question 15

Product-quality-related costs are part of a total quality control program. A product-quality-related cost incurred in detecting individual products that do not conform to specifications is an example of a(n):

Accepted Answer

A) Prevention cost. 
B) Appraisal cost. 
C) Internal failure cost. 
D) External failure cost. 
E) Opportunity cost. 
A) Prevention cost. 
B) Appraisal cost. 
C) Internal failure cost. 
D) External failure cost. 
E) Opportunity cost.

Question 16

White Financial Services Corporation is engaged in mortgage origination and investment servicing activities with annual revenues of more than $90 million. Roberta White, CEO, recently has discovered that errors are costing the company over $800,000 per year. Jeremy Aiken, Vice President of Sales, dismisses the significance of the errors. Since the cost of errors is less than 1% of revenues, he believes the company should ignore the errors and concentrate instead on generating additional revenues. The consulting firm that made the discovery proposed to establish operating procedures for White that would build quality checks into operations. The interviewing, writing, and training activities associated with this project are expected to cost $450,000. Once the procedure is in place, the consultant believes, all errors will be eliminated. Jeremy argues that no system can be error-free and that the procedure is most likely to eliminate 80 percent of the errors. James White, Vice President of Customer Services, suggests that the company can hire 10 additional workers at an average salary of $30,000 (including fringe benefits) to double-check the work of people in sensitive areas.
Required: What do you think White Financial Services Company should do? Support your answer with a logical analysis of the three alternatives (hire the consulting firm, hire additional workers, or do nothing about the errors and concentrate on additional revenues).

Accepted Answer

Answer may vary
Feedback: The best solut

Question 17

Chapter 17 presents as Exhibit 17.3 a framework that can be used as the basis for creating a comprehensive system for managing and controlling quality.
Required: Provide an overview of the key elements of the framework presented in the chapter.

Accepted Answer

Answer may vary
Feedback: The primary el

Question 18

In a Cost of Quality (COQ) reporting framework, scrap costs because of quality failure would be classified as:

Accepted Answer

A) Prevention costs. 
B) Salvage costs. 
C) Appraisal costs. 
D) Internal failure costs. 
E) External failure costs. 
A) Prevention costs. 
B) Salvage costs. 
C) Appraisal costs. 
D) Internal failure costs. 
E) External failure costs.

Question 19

An electronic component in a computer has an output voltage specification of 100 ± 1 millivolts. The loss to the firm for a component that is outside of the specifications is $750. The output voltage for a sample unit is 101 millivolts.
Required:
1.Calculate the value of k, the cost coefficient in the Taguchi loss function.
2. Calculate the amount of loss L(101), for the sample unit.

Accepted Answer

Answer may vary
Feedback:
1. k

Question 20

The "cost of conformance" in a Cost-of-Quality reporting system includes:

Accepted Answer

A) Prevention costs and appraisal costs. 
B) Internal failure costs and external failure costs. 
C) Prevention costs and internal failure costs. 
D) Appraisal costs and internal failure costs. 
E) Prevention costs and external failure costs. 
A) Prevention costs and appraisal costs. 
B) Internal failure costs and external failure costs. 
C) Prevention costs and internal failure costs. 
D) Appraisal costs and internal failure costs. 
E) Prevention costs and external failure costs.

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

ISO certification is a key component of a firm's efforts to improve quality and compete successfully. Required: What must an organization demonstrate, in terms of its operating processes, in order to become ISO-9000 certified?

Which of the following is not true regarding the determination of relevant costs and relevant revenues associated with quality-related initiatives (such as the move to JIT production)?

A graphical representation of frequency of occurrence of the factors contributing to an indicated quality problem, ordered from the most to the least frequent, is a(n):

What is the amount of the estimated loss, L(x), using a Taguchi loss function, when the actual quality characteristic, x, is 0.405?

ISO 14000:

A graph that depicts successive observations of an operation taken at constant intervals is a(n):

In 2013 a manufacturing company instituted a Total Quality Management (TQM) program and one year later produced the report shown below: On the basis of the above report, which one of the following statements is most likely correct?

For Hanson, what is the value of k, the cost coefficient in the Taguchi Loss Function?

What is the current 2012 total Cost of Quality (COQ)?

A quality circle:

Within a Cost-of-Quality (COQ) system, product liability resulting from a legal action is classified as a(n):

All of the following costs are generally included in a Cost-of-Quality (COQ) report except:

Product-quality-related costs are part of a total quality control program. A product-quality-related cost incurred in detecting individual products that do not conform to specifications is an example of a(n):

Chapter 17 presents as Exhibit 17.3 a framework that can be used as the basis for creating a comprehensive system for managing and controlling quality. Required: Provide an overview of the key elements of the framework presented in the chapter.

In a Cost of Quality (COQ) reporting framework, scrap costs because of quality failure would be classified as:

The "cost of conformance" in a Cost-of-Quality reporting system includes:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

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Exam 17: The Management and Control of Quality

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

ISO certification is a key component of a firm's efforts to improve quality and compete successfully. Required: What must an organization demonstrate, in terms of its operating processes, in order to become ISO-9000 certified?

Which of the following is not true regarding the determination of relevant costs and relevant revenues associated with quality-related initiatives (such as the move to JIT production)?

A graphical representation of frequency of occurrence of the factors contributing to an indicated quality problem, ordered from the most to the least frequent, is a(n):

What is the amount of the estimated loss, L(x), using a Taguchi loss function, when the actual quality characteristic, x, is 0.405?

ISO 14000:

A graph that depicts successive observations of an operation taken at constant intervals is a(n):

In 2013 a manufacturing company instituted a Total Quality Management (TQM) program and one year later produced the report shown below: On the basis of the above report, which one of the following statements is most likely correct?

For Hanson, what is the value of k, the cost coefficient in the Taguchi Loss Function?

What is the current 2012 total Cost of Quality (COQ)?

A quality circle:

Within a Cost-of-Quality (COQ) system, product liability resulting from a legal action is classified as a(n):

All of the following costs are generally included in a Cost-of-Quality (COQ) report except:

Product-quality-related costs are part of a total quality control program. A product-quality-related cost incurred in detecting individual products that do not conform to specifications is an example of a(n):

Chapter 17 presents as Exhibit 17.3 a framework that can be used as the basis for creating a comprehensive system for managing and controlling quality. Required: Provide an overview of the key elements of the framework presented in the chapter.

In a Cost of Quality (COQ) reporting framework, scrap costs because of quality failure would be classified as:

The "cost of conformance" in a Cost-of-Quality reporting system includes:

Cost Management and Strategy

Implementing Strategy: the Value Chain, the Balanced Scorecard, and the Strategy Map

Basic Cost Management Concepts

Job Costing

Activity-Based Costing and Customer Profitability Analysis

Process Costing

Cost Allocation: Departments, Joint Products, and By-Products

Cost Estimation

Short-Term Profit Planning: Cost-Volume-Profit Cvp Analysis

Strategy and the Master Budget

Decision Making With a Strategic Emphasis

Strategy and the Analysis of Capital Investments

Cost Planning for the Product Life Cycle: Target Costing, Theory of Constraints, and Strategic Pricing

Operational Performance Measurement: Sales, Direct-Cost Variances, and the Role of Nonfinancial Performance Measures

Operational Performance Measurement: Indirect-Cost Variances and Resource-Capacity Management

Operational Performance Measurement: Further Analysis of Productivity and Sales

Strategic Performance Measurement: Cost Centers, Profit Centers, and the Balanced Scorecard

Strategic Performance Measurement: Investment Centers and Transfer Pricing

Management Compensation, Business Analysis, and Business Valuation

Filters