Deck 7: Managing Quality and Time to Create Value

Question 1

The return-on-quality (ROQ) view of quality management assumes that there is a tradeoff between the costs and benefits of improving quality.

Answer 1

True

Question 2

A defect is an attribute of a product, either tangible or intangible, that falls short of customer expectations.

Answer 2

True

Question 3

The optimum quality level maximizes total quality rather than total profits.

Answer 3

False

Question 4

The optimum quality level is always higher than the maximum quality level.

Question 5

Total quality management (TQM) assumes that improvements in quality, as defined by customers, will always result in improved organizational performance.

Question 6

Two generally accepted quality dimensions are product or service attributes and profitability from an individual customer.

Question 7

A run chart is a chart that shows trends in variations in products or service attributes over time by reflecting measures of important quality features taken at defined points in time.

Question 8

The maximum and minimum desired levels on a control chart are called the upper control limit and the lower control limit.

Question 9

A control chart describes variation in product or service attributes over time by measuring important quality features and comparing them to maximum and minimum desired levels.

Question 10

A histogram is a chart that shows trends in variation in products or service attributes over time by reflecting measures of important quality features taken at defined points in time.

Question 11

Cause-and effect-analysis involves formulating diagnostic signals that identify potential causes of product or service defects.

Question 12

Lead indicator information usually identifies quality problems and diagnoses their cause(s).

Question 13

A scatter diagram is a plot of two measures that may be related.

Question 14

Errors due to inadequate or outdated work instructions can be best diagnosed using run and control charts.

Question 15

A flowchart is a plot of two measures that may be related that helps to diagnose cause-and-effect between outcomes and activities that may drive them.

Question 16

Variations in customer service leading to poor-quality service can be most effectively diagnosed using a histogram.

Question 17

A Pareto chart prioritizes the causes of problems or defects as bars of varying height, in order of frequency or size.

Question 18

Organizations usually sort costs of quality by quality activity and express them as a percentage of total costs.

Question 19

Customer satisfaction is the degree to which expectations of attributes, customer service, and price have been or are expected to be met.

Question 20

Wasted time would generally be categorized as an external failure activity.

Question 21

Redoing customer service is classified as an external failure activity.

Question 22

Field testing products in use at customer sites is classified as a prevention activity.

Question 23

Performance measurement is classified as an appraisal activity.

Question 24

Internal failure activities are required to correct defective processes, products, and services that are detected after they have been delivered to customers.

Question 25

Engaging in marketing activities to improve a company's image that has been tarnished from poor product quality is an example of an external failure activity

Question 26

The Malcolm Baldrige Quality Award is awarded to companies around the world that excel in quality improvement.

Question 27

The Deming Prize is awarded to companies around the world that excel in quality improvement.

Question 28

New product or service development time is the period between the first consideration of a product or service and its initial sale to the customer.

Question 29

Production cycle time is the elapsed time between starting and finishing a process, including any time to correct mistakes.

Question 30

Production cycle time does not factor in time to correct mistakes.

Question 31

Throughput is the amount of goods and services produced and delivered to customers during a period of time measured in dollar terms or physical measures.

Question 32

Total factor productivity is measured by dividing total cost of providing goods and services by the value of goods and services.

Question 33

In computing average cycle time, companies should include the time of reworking defective units.

Question 34

The throughput time ratio is the ratio of time spent adding customer value to products divided by total cycle time.

Question 35

Cycle time is the time from the receipt of an order of a unit of existing product or service to its packaging and shipment to the customer.

Question 36

New product development time is the period between the first consideration of a product and its initial sale to the customer.

Question 37

The throughput time ratio measures the relative percentage of value-added time spent on processing a customer's order.

Question 38

Effective production management results in higher cycle times and high throughput.

Question 39

Total factor productivity is the value of goods and services divided by the cost of providing them.

Question 40

Practical capacity is always more than theoretical capacity.

Question 41

The highest possible value of the throughput time ratio is 200%.

Question 42

The objective of just-in-time (JIT) is to eliminate all defects in products.

Question 43

Just-in-time (JIT) processes have short cycle times.

Question 44

Inventory carrying costs include receiving, handling, storage and obsolescence.

Question 45

Companies using just-in-time inventory (JIT) systems generally experience lower inventory turnover than those not using JIT.

Question 46

Just-in-time concepts do not apply to service organizations.

Question 47

A company that has implemented a just-in-time manufacturing system is utilizing the "push"
philosophy of manufacturing.

Question 48

In a just-in-time manufacturing system, a sales order will normally trigger a production order.

Question 49

A statistical control chart displays customer response times against the historical mean and historical variation.

Question 50

Control limits in a statistical control chart will always be symmetrical.

Question 51

A process can be out of control even if attribute measures do not violate control limits.

Question 52

Which of the following statements about quality is False?

A) The maximum quality level is almost always lower than the optimum quality level
B) Total delight represents a condition when a customer receives a product or service far exceeding his or her expectations of quality
C) Return on quality is the view that assumes there is a tradeoff between the costs and benefits of improving quality
D) Optimum quality level of products and services maximizes profits rather than quality

Question 53

Which of the following statements is True about the return-on-quality (ROQ) view of quality management

A) Assumes that improvements in quality will always result in improved organizational performance
B) Assumes that there is a trade-off between the costs of quality and the benefits of improving quality
C) Has a goal of exceeding customers' quality expectations
D) Assumes that customers are willing to pay a premium for higher quality products and services

Question 54

Which of the following is a tangible feature of a product or service?

A) Reputation
B) Taste
C) Style
D) Adherence to specifications

Question 55

Which of the following is an intangible feature of a product or service?

A) Performance
B) Adherence to specifications
C) Taste
D) Functionality

Question 56

Which of the following is not an internal failure activity?

A) Disposal
B) Delaying processes
C) Warranty repairs
D) Reinspecting

Question 57

Which of the following is an external failure activity?

A) Disposing of scrap
B) Rework
C) Delaying processes
D) Restoration of reputation

Question 58

Which of the following is not an external failure activity?

A) Resolving customer complaints
B) Settling product liability
C) Disposing of scrap
D) Field replacements

Question 59

Which of the following is an appraisal activity?

A) Disposing of Scrap
B) Performing Rework
C) Customer-complaint resolution
D) Inspecting processes

Question 60

Which of the following statements describes a histogram?

A) Shows trends in variation in product or service attributes over time by reflecting measures of importan quality features taken at defined points in time
B) Displays frequency distribution of an attribute's measures around an average attribute value
C) Describes variation in product or service attributes over time by measuring important quality feature and comparing to maximum and minimum desired levels
D) Plots two measures that may be related to diagnose cause and effect outcomes and activities that may drive them

Question 61

Which of the following statements describes a scatter diagram?

A) Shows trends in variation in product or service attributes over time by reflecting measures of
B) important quality features taken at defined points in time
C) Displays frequency distribution of an attribute's measures around an average attribute value
D) Describes variation in product or service attributes over time by measuring important quality features . and comparing to maximum and minimum desired levels
E) Plots two measures that may be related to diagnose cause and effect outcomes and activities that may drive them

Question 62

Which of the following statements describes a run chart?

A) Shows trends in variation in product or service attributes over time by reflecting measures of importan quality features taken at defined points in time
B) Displays frequency distribution of an attribute's measures around an average attribute value
C) Plots two measures that may be related to diagnose cause and effect outcomes and activities that may drive them

Question 63

Which of the following statements describes a control chart?

A) Shows trends in variation in product or service attributes over time by reflecting measures of important quality features taken at defined points in time
B) Displays frequency distribution of an attribute's measures around an average attribute value
C) Describes variation in product or service attributes over time by measuring important quality features and comparing to maximum and minimum desired levels
D) Plots two measures that may be related to diagnose cause and effect outcomes and activities that may drive them

Question 64

Which of the following statements describes a flowchart?

A) Shows trends in variation in product or service attributes over time by reflecting measures of important quality features taken at defined points in time
B) Displays frequency distribution of an attribute's measures around an average attribute value
C) Reflects cause and effect and sequential linkages among process activities
D) Plots two measures that may be related to diagnose cause and effect outcomes and activities that may drive them

Question 65

Which of the following statements describes a Pareto chart?

A) Prioritizes the causes of problems or defects as bars of varying height, in order of frequency or size
B) Displays frequency distribution of an attribute's measures around an average attribute value
C) Reflects cause and effect and sequential linkages among process activities
D) Plots two measures that may be related to diagnose cause and effect outcomes and activities that may drive them

Question 66

Cook Corporation is trying to identify potential causes of product or service defects. Which of the following will be most useful to Cook:

A) Flowchart
B) Pareto chart
C) Cause-and-effect diagram
D) Run chart

Question 67

Shaw Company is trying to identify the most frequent causes of its quality problems so that it can concentrate on those that offer the greatest potential for improvement. The quality tool that would be most useful to Shaw is:

A) Flowchart
B) Pareto chart
C) Cause-and-effect diagram
D) Run chart

Question 68

Brice Corporation suspects that improper information given to customers by customer service is related to the time spent by employees in responding to customer service calls. The quality tool that would be most useful to Brice in diagnosing this relationship is:

A) Flowchart
B) Pareto chart
C) Cause-and-effect diagram
D) Scatter diagram

Question 69

The Malcolm Baldrige Award:

A) Is awarded to companies around the world that excel in quality improvement
B) Is awarded to the company that does the best job of adhering to ISO 9000 standards
C) Recognizes U.S. firms with outstanding records of quality improvements and quality management
D) Is required to received ISO 9000 certification

Question 70

The Deming Prize:

A) Is awarded to companies around the world that excel in quality improvement
B) Is awarded to the company that does the best job of adhering to ISO 9000 standards
C) Recognizes U.S. firms with outstanding records of quality improvements and quality management
D) Is required to received ISO 9000 certification

Question 71

Which of the following will not reduce customer response time?

A) Electronic ordering
B) Eliminating non-value-added activities
C) Increasing production cycle time
D) Eliminating bottlenecks

Question 72

Which of the following represents the throughput time ratio?

A) Ratio of time spent adding customer value to products and services divided by total cycle time
B) Ratio of total cycle time divided by time spent adding customer value to products and services
C) Ratio of outcomes of a process divided by the amount of resources necessary to complete the process
D) Ratio of amount of resources necessary to complete a process divided by the outcomes of a process

Question 73

Dunn Corporation finds that 60% of the time spent in its manufacturing process is on non-value added activities such as moving parts and inspection. Dunn needs to improve:

A) Its throughput
B) Its customer-response time
C) Its throughput time ratio
D) Its average cycle time

Question 74

Companies using just-in-time (JIT) inventory systems will generally have:

A) Higher inventory turnover and lower total sales than traditional companies
B) Higher inventory turnover and higher total sales than traditional companies
C) Lower inventory turnover and higher sales per employee than traditional companies
D) Higher inventory turnover and higher sales per employee than traditional companies

Question 75

Identify the company or companies below that is (are) most likely using a traditional inventory system as opposed to a JIT system.

A) Alpha
B) Beta
C) Gamma
D) Both Alpha and Beta

Question 76

Which of the following is not one of the three dimensions of time that successful organizations must focus on?

A) The length of time of the average workweek
B) Customer response time
C) Cycle time
D) Service development time

Question 77

Use the following to answer questions:
Le Francois Company developed the following information for its first quarter cost of quality report:


-The total cost of prevention activities for Le Francois Company is:

A) $294,000
B) $224,000
C) $459,200
D) $504,000

Question 78

Use the following to answer questions:
Le Francois Company developed the following information for its first quarter cost of quality report:


-The relevant percentage to be used to express internal failure activities at Le Francois is:

A) 27.9%
B) 4.77%
C) 4.2%
D) 15.02%

Question 79

Use the following to answer questions:
Le Francois Company developed the following information for its first quarter cost of quality report:


-The total cost of external failure activities at Le Francois is:

A) $420,560
B) $15,960
C) $117,600
D) $175,000

Question 80

Use the following to answer questions:
Le Francois Company developed the following information for its first quarter cost of quality report:


-The relevant percentage to be used to express appraisal activities at Le Francois is:

A) 5.7%
B) 33.2%
C) 2.75%
D) 5%