Week 7 - 11

Question 1

Whether the product or service meets or exceeds customer’s expectations.

Answer 1

Quality

Question 2

The unyielding and continually improving effort by everyone in an organization to understand, meet and exceed the expectation of customers.

Answer 2

Total Quality Management

Question 3

Core Principles of TQM

Answer 3

Focus on satisfying the customer
Strive for continuous improvement
Involve fully the entire workforce
Support and involve top management actively
Use clear and measurable objective
Recognize quality achievements in a timely manner
Provide training on TQM continuously

Question 4

Ultimate recipient of the firm’s products or services.

Answer 4

External Customers

Question 5

Individuals or subunits within the firm involved in manufacturing the product or providing the services.

Answer 5

Internal Customers

Question 6

A small group of employees from the same work are that meets regularly to identify and solve work related problems and to implement and monitor solutions to the problems.

Answer 6

Quality Circle

Question 7

They believes that a typical organization takes three to five years to make from traditional management to TQM.

Answer 7

Institute of Management Accountants

Question 8

What are included in year one of the 11-phase process to establish TQM?

Answer 8

Create quality council and staff
Conduct executive-quality training programs
Conduct quality audits
Prepare gap analysis
Develop strategy on quality improvement

Question 9

What are included in year two of the 11-phase process to establish TQM?

Answer 9

Conduct employee communication and training program
Establish quality teams
Create a measurement system and set goals

Question 10

What are included in year three of the 11-phase process to establish TQM?

Answer 10

Revise compensation / appraisal / recognition systems
Launch external initiative with suppliers
Review and revise

Question 11

What is year one?

Answer 11

Preparation and Planning

Question 12

What is year two?

Answer 12

Training and Implementation

Question 13

What is year three?

Answer 13

Assessment, Review & Revise

Question 14

Types of Conformance

Answer 14

Goalpost Conformance (zero-defects conformance)
Absolute Quality Conformance (robust quality approach)

Question 15

Quality specification expressed as a specified range around the target.

Answer 15

Goalpost Conformance (zero-defects conformance)

Question 16

Is the ideal or desired outcome of the operations.

Answer 16

Target

Question 17

All products or services meet the target value exactly with no variation.

Answer 17

Absolute Quality Conformance (robust quality approach)

Question 18

Comes with meeting the exact target consistently.

Answer 18

Robustness

Question 19

Involves organizations that are among the best in the world at performing a large task.

Answer 19

Benchmarking

Question 20

Costs of Quality

Answer 20

Prevention Costs
Appraisal Costs
Internal Failure Costs
External Failure Costs

Question 21

Costs incurred to avoid poor-quality goods or services or reduce the number of defects in products or services.

Answer 21

Prevention Costs

Question 22

Also called inspection costs, incurred to identify products before the products are shipped to customers.

Answer 22

Appraisal Costs

Question 23

Costs that result from identification of defects during the appraisal process.

Answer 23

Internal Failure Costs

Question 24

Incurred when poor-quality goods or services are detected after delivery to customers.

Answer 24

External Failure Costs

Question 25

What are included in prevention costs?

Answer 25

1. Systems development 2. Quality data gathering, analysis, and reporting 3. Quality engineering 4. Quality training 5. Quality improvement projects 6. Quality circles 7. Technical Support provided to suppliers 8. Statistical process control activities 9. Supervision of prevention activities 10. Audits of the effectiveness of the quality system

Question 26

What are included in appraisal costs?

Answer 26

1. Test and inspection of incoming materials 2. Supervision of testing and inspection activities 3. Test and inspection of in-process goods 4. Depreciation of test equipment 5. Maintenance of test equipment 6. Finished product testing and inspection 7. Plant utilities in the inspection area 8. Field testing and appraisal at customer site 9. Supplies used in testing and inspection

Question 27

What are included in internal failure costs?

Answer 27

1. Net cost of scrap 2. Disposal of defective products 3. Net cost of spoilage 4. Analysis of the cause of defects in production 5. Rework labor and overhead 6. Reinspection of reworked products 7. Re-entering data because of keying errors 8. Retesting of reworked products 9. Downtime caused by quality problems 10. Debugging of software errors

Question 28

What are included in external failure costs?

Answer 28

1. Cost of field servicing and handling complaints 2. Liability arising from defective products 3. Warrant repairs and replacements 4. Returns and allowances arising from quality problems 5. Repairs and replacements beyond the warranty period 6. Lost sales arising from a reputation 7. Product recalls for poor quality

Question 29

They are incurred to ensure that products and services meet customer's expectations. (costs of conformance)

Answer 29

Prevention and appraisal costs

Question 30

They are costs incurred and opportunity costs because of rejection of products or services. (costs of nonconformance)

Answer 30

Internal failure and external failure costs

Question 31

The sum of conformance and nonconformance costs.

Answer 31

Cost or quality

Question 32

They are incurred in an effort to keep poor quality of conformance from occurring.

Answer 32

Prevention costs and appraisal costs

Question 33

They are incurred because poor quality of conformance has taken place.

Answer 33

Internal failure costs and external failure costs