Question 1

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 2

As noted in Chapter 17, one approach to setting quality standards is to use a Six Sigma approach.
Required:
1. What is meant by the term "Six Sigma"?
2. The overall process of implementing process-improvement projects is referred to as DMAIC (Define, Measure, Analyze, Improve, and Control). Provide an overview of each stage of the DMAIC specifically within the context of a Six Sigma implementation.

Accepted Answer

Answer may vary
Feedback:
1. The term Si

Question 3

Which of the following items is not considered an external quality metric?

Accepted Answer

A) On-time delivery rates. 
B) Customer response time (CRT). 
C) Number of customer complaints. 
D) Throughput efficiency (i.e., the ratio of throughput to resources used). 
E) Percentage of products that experience early or excessive failure. 
A) On-time delivery rates. 
B) Customer response time (CRT). 
C) Number of customer complaints. 
D) Throughput efficiency (i.e., the ratio of throughput to resources used). 
E) Percentage of products that experience early or excessive failure.

Question 4

Which of the following terms refers to a mathematical depiction of estimated quality costs and the level of deviation from a quality target?

Accepted Answer

A) Six sigma. 
B) Cost of Quality (COQ) Reporting. 
C) Taguchi quality loss function. 
D) Target costing. 
E) Goalpost quality conformance. 
A) Six sigma. 
B) Cost of Quality (COQ) Reporting. 
C) Taguchi quality loss function. 
D) Target costing. 
E) Goalpost quality conformance.

Question 5

What is the change in total quality cost projected for 2013?

Accepted Answer

A) $400,000 decrease. 
B) $290,000 decrease. 
C) $550,000 decrease. 
D) $560,000 decrease. 
E) $580,000 decrease. 
A) $400,000 decrease. 
B) $290,000 decrease. 
C) $550,000 decrease. 
D) $560,000 decrease. 
E) $580,000 decrease.

Question 6

Hyland Company manufactures generic products for several major discount chain stores. Robert Hyland, founder and CEO, has always followed a strategy of producing low-cost standardized products. Hyland now is facing foreign competitors who offer similar products with higher quality and more features (options) than Hyland's products. Although Hyland still offers the lower prices than its competitors, Hyland's net income has been steadily decreasing over the last three quarters.
Required: What should Hyland do?

Accepted Answer

Answer may vary
Feedback: Hyland must fo

Question 7

Which of the following is not a likely consequence of investments made to improve quality?

Accepted Answer

A) Reduced inventory turnover. 
B) Lower sales returns and sales allowances. 
C) Lower holdings of inventory. 
D) Faster throughput time. 
E) Reduced field-service costs. 
A) Reduced inventory turnover. 
B) Lower sales returns and sales allowances. 
C) Lower holdings of inventory. 
D) Faster throughput time. 
E) Reduced field-service costs.

Question 8

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 9

What is the cost coefficient, k, for the Taguchi loss function associated with this situation?

Accepted Answer

A) $10. 
B) $500. 
C) $10,000. 
D) $1,000,000. 
E) $2,000,000. 
A) $10. 
B) $500. 
C) $10,000. 
D) $1,000,000. 
E) $2,000,000.

Question 10

Which of the following is not a characteristic of lean manufacturing?

Accepted Answer

A) Increase in product flow (that is, throughput). 
B) Increase in product quality. 
C) Increase in inventory. 
D) Establishment of long-term relationships with suppliers. 
E) Continuous-improvement perspective. 
A) Increase in product flow (that is, throughput). 
B) Increase in product quality. 
C) Increase in inventory. 
D) Establishment of long-term relationships with suppliers. 
E) Continuous-improvement perspective.

Question 11

The Old Army Jean Company has been very proud of the quality of its products. The company has won industry awards for high quality and trend-setting styles in the last five years. For the last two years, however, both sales volume and market share have been declining. At the latest executive managers' meeting, everyone was blaming everyone else for the decline. Both production and design managers suggested that sales relationships were the cause of most of the problems.
Required: As the CEO, how would you determine that quality of sales relationships, not product design or product quality, is the cause of the financial decline the company is experiencing?

Accepted Answer

Answer may vary
Feedback: Other than pro

Question 12

Which of the following is not an expected result of improved quality of operations?

Accepted Answer

A) Decreased inventory turnover. 
B) Higher product/service selling prices. 
C) Faster throughput time. 
D) Lower total manufacturing cost. 
E) Increased sales volume. 
A) Decreased inventory turnover. 
B) Higher product/service selling prices. 
C) Faster throughput time. 
D) Lower total manufacturing cost. 
E) Increased sales volume.

Question 13

Which of the following statements is not true?

Accepted Answer

A) The term "quality" is generally defined as customer satisfaction with the total experience of a product or service. 
B) Quality consists of two broad components: performance quality and non-performance quality. 
C) Performance quality represents the difference between the design specifications of a product and the actual performance of the product. 
D) Quality of design represents the difference between customer expectations and product design. 
E) Total quality represents the difference between customer expectations and the actual performance of a product or service. 
A) The term "quality" is generally defined as customer satisfaction with the total experience of a product or service. 
B) Quality consists of two broad components: performance quality and non-performance quality. 
C) Performance quality represents the difference between the design specifications of a product and the actual performance of the product. 
D) Quality of design represents the difference between customer expectations and product design. 
E) Total quality represents the difference between customer expectations and the actual performance of a product or service.

Question 14

Design Products is committed to its quality program. It works with all areas of the company to establish sound quality programs within reasonable budget guidelines. For 2013, it has budgeted $1,000,000 for prevention costs and $800,000 for appraisal costs. Internal failure has a budget of $100 per failed item, while external failure has a total budget of $600,000.Product Testing has proposed to a change in the 2013 budget for a new method of testing products. If management decides to implement the new method, $2 per unit of appraisal costs will be saved, up to a level of 200,000 tests. No additional savings are above past the 200,000 level. The new method involves $110,000 in training costs and $60,000 in yearly testing supplies. Traditionally, 3 percent of all completed items have to be reworked. External failure costs average $120 per failed unit. The company's average external failures are 1 percent of units sold. The company carries no ending inventories.
Required:
1. What is the adjusted budget for appraisal costs, assuming the new method is implemented and 800,000 units are tested during the manufacturing process in 2013?
2. How much do internal failure costs change, assuming 600,000 units are tested under the new method and it reduces the amount of unacceptable units in the manufacturing process by 40 percent?
3. What would be the change in the external failure budget, assuming external failures are reduced by 60 percent, assuming the same facts as in Requirement 2?

Accepted Answer

Answer may

Question 15

Which of the following is not one of the five principles of lean manufacturing?

Accepted Answer

A) Demand-push production. 
B) Value stream accounting. 
C) Demand-pull production. 
D) Employee empowerment. 
E) Perfection and continuous improvement. 
A) Demand-push production. 
B) Value stream accounting. 
C) Demand-pull production. 
D) Employee empowerment. 
E) Perfection and continuous improvement.

Question 16

The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:

Accepted Answer

A) Cause-and-effect diagram. 
B) Statistical run chart. 
C) Pareto diagram. 
D) Histogram. 
E) Statistical control chart. 
A) Cause-and-effect diagram. 
B) Statistical run chart. 
C) Pareto diagram. 
D) Histogram. 
E) Statistical control chart.

Question 17

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 18

An electronic component has an output voltage specification of 138 ± 5 millivolts. The loss to the firm for a component that is outside of the specifications is $220. The output voltage for a sample unit is 134 millivolts.
Required:
1. Calculate the value of k, the cost coefficient in the Taguchi Quality Loss Function for the above situation.
2. Calculate the amount of estimated loss for the sample unit, L(x) (where x = 134 millivolts).
3. Recalculate the amount of the estimated loss if the output voltage, x, for the sample unit is 136 millivolts.
4. Recalculate the amount of the estimated loss of the output voltage, x, for the sample unit is 138 millivolts.
5. What is the primary insight revealed by the Taguchi Quality Loss Function?

Accepted Answer

Answer may vary
Feedback:
1. k = Total q

Question 19

In a Cost- of- Quality reporting framework, costs incurred to keep quality defects from occurring are classified as:

Accepted Answer

A) Customer-failure costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) Prevention costs. 
E) Detection costs. 
A) Customer-failure costs. 
B) Appraisal costs. 
C) Internal failure costs. 
D) Prevention costs. 
E) Detection costs.

Question 20

Which of the following items represents a quadratic loss function associated with deviation of actual quality from target quality?

Accepted Answer

A) ISO 9000. 
B) Absolute conformance quality function. 
C) Cost of Quality (COQ) loss function. 
D) Taguchi quality loss function. 
E) Conformance quality loss function. 
A) ISO 9000. 
B) Absolute conformance quality function. 
C) Cost of Quality (COQ) loss function. 
D) Taguchi quality loss function. 
E) Conformance quality loss function.

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

Which of the following items is not considered an external quality metric?

Which of the following terms refers to a mathematical depiction of estimated quality costs and the level of deviation from a quality target?

What is the change in total quality cost projected for 2013?

Which of the following is not a likely consequence of investments made to improve quality?

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

What is the cost coefficient, k, for the Taguchi loss function associated with this situation?

Which of the following is not a characteristic of lean manufacturing?

Which of the following is not an expected result of improved quality of operations?

Which of the following statements is not true?

Which of the following is not one of the five principles of lean manufacturing?

The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:

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):

In a Cost- of- Quality reporting framework, costs incurred to keep quality defects from occurring are classified as:

Which of the following items represents a quadratic loss function associated with deviation of actual quality from target quality?

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

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

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

Which of the following items is not considered an external quality metric?

Which of the following terms refers to a mathematical depiction of estimated quality costs and the level of deviation from a quality target?

What is the change in total quality cost projected for 2013?

Which of the following is not a likely consequence of investments made to improve quality?

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

What is the cost coefficient, k, for the Taguchi loss function associated with this situation?

Which of the following is not a characteristic of lean manufacturing?

Which of the following is not an expected result of improved quality of operations?

Which of the following statements is not true?

Which of the following is not one of the five principles of lean manufacturing?

The tool that can be used to depict main causes for an identified quality problem, subdivided into categories represented as machines, materials, methods, and manpower, is called a:

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):

In a Cost- of- Quality reporting framework, costs incurred to keep quality defects from occurring are classified as:

Which of the following items represents a quadratic loss function associated with deviation of actual quality from target quality?

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

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