Quality costing is similar in service and manufacturing organizations. Nevertheless, the differences between these organizations have certain implications for quality management.Thus,
Answer(s): B
External failure costs arise when problems occur after delivery. They occur because products or services are nonconforming or otherwise do not satisfy customers. External failure costs in service enterprises are even more important than in manufacturing environments. Faulty goods sometimes may be reworked or replaced to a customer's satisfaction, but poor service tends to result in a loss of customers.
An organization has adopted the robust quality approach. According to this view of quality,
Answer(s): D
The optimal level of quality costs traditionally has been deemed to occur where the conformance cost curve intercepts the nonconformance cast curve, which corresponds to the minimum point on the total cost curve. Thus, beyond some point, incurrence of prevention and appraisal costs is not cost beneficial. However, the modern robust quality view is that this relationship does not always hold. Improving quality and reducing costs in each category may be possible if the most efficient prevention methods are applied. For example, selection of a supplier meeting high quality standards regarding defect rates and delivery times may drive dawn not only failure casts but also the prevention and appraisal casts incurred when supplier performance was less reliable. Thus, conformance casts do not have to continue to increase to obtain additional reductions in nonconformance casts.
Management of a company is attempting to build a reputation as a world-class manufacturer of quality products.Which of the following measures would not be used by the firm to measure quality?
The number of parts shipped per day would most likely be used as a measure of the effectiveness and efficiency of shipping procedures, not the quality of the product. This measure does not consider how many of the parts are defective.
In Year 2, a manufacturing company instituted a total quality management TQM) program producing the following report:On the basis of this report, which one of the fallowing statements is most likely true?
Answer(s): A
TQM emphasizes the supplier's relationship with the customer and recognizes that everyone in a process is at some time a customer or supplier of someone else, either within or outside the organization. The costs of quality include costs of conformance and costs of nonconformance. Casts of conformance include prevention costs and appraisal inspection) costs. Nonconformance costs are composed of internal failure costs and external failure costs, such as lost opportunity. Conformance costs prevention and appraisal) increased substantially, whereas the nonconformance casts internal and external failure) decreased.Hence, the increase in conformance casts resulted in a higher-quality product.
Quality cost indices are often used to measure and analyze the cost of maintaining a given level of quality. One example of a quality cost index, which uses a direct labor base, is computed asBased upon these costs data, the quality cost index:
The index for May was [US $4,000 + $6,000 + $12,000 + $14,000) $90,000], and the index for June was 6% [US $5,000 + $5,000 + $15,000 + $-11,000) $100,000].
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