Exam 17: The Management and Control of Quality

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.

In an effort to improve its competitive position, J. J. Borden Company recently introduced Just-in-Time (JIT) production techniques. Its management accountant assembled the following data regarding the recent change: Inventory financing cost is estimated as 15% per year. Required: 1. Estimate the net financial benefit (expressed in terms of operating income) that the company realized from the switch to JIT manufacturing. 2. List four (4) nonfinancial benefits the company might expect as a result to its move to JIT. 3. What are the primary expected costs of implementing a JIT system?

ISO 14000:

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

What is the cost coefficient, k, in the Taguchi loss function for this company?

Using a Taguchi loss function for this company, what is the amount of the estimated loss when the actual quality characteristic, x, is 0.505?

Heidelberg Manufacturing specifies the quality characteristic for one of its key components to be 154" ±4. The cost of failure is estimated to be $8,000 per unit. Using the Taguchi Loss Function the firm has estimated the loss, L(x), at the quality characteristic that the firm has experienced, x, to be $4,500. What is the estimated loss if the deviation from the value of the quality characteristic doubled?

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

The term Six Sigma refers to:

Which of the following is a tool that indicates how frequently each type of quality defect occurs?

Which of the following is not a characteristic of a lean accounting system?

Which of the following terms represents the unyielding and continuous effort by everyone in the organization to understand, meet, and exceed customer expectations?

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?

Which of the following is not a nonfinancial quality metric?

Which of the following statements about nonfinancial indicators of quality is not true?

Oslo Company's target quality characteristic, T, for one of its key components is set at 82. Using the Taguchi Loss Function the company has determined the cost coefficient, k, to be $6,000. What is the estimated loss, L(x), if the value of the quality characteristic, x, is 85?

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?

An example of an internal failure cost in a Cost-of-Quality (COQ) reporting system is:

Over the last few months, Ithaca Precision Instruments (IPI) obtained the following measurements on a key quality characteristic of its product: The company's experience has been that a customer will reject a product that deviates from the target quality characteristic of 0.50 by more than 0.004. Each rejection costs the firm $5. Determine the expected loss of the observed quality characteristic for IPI. Round final steps of calculation to 4 decimal places .

One of the concerns with moving to lean manufacturing is the fact that conventional accounting approaches may discourage such a move. These deficiencies relate to the lag in recognizing financial benefits from the move to lean. Required: According to critics, what are the three primary reasons why improvements in financial results, after adopting lean manufacturing, typically appear later in conventional accounting statements than the operating improvements from implementing lean manufacturing?