1. All of the following are important non-value-adding process activities except:

a. storing products for which there is little immediate demand.

b. sealing the finish on materials prior to assembly.

c. moving materials.

d. experiencing unscheduled production interruptions.

2. A graph of actual process results that shows upper and lower limits for the process and which is used to detect when the process is out of control is known as a:

a. control chart.

b. pareto chart.

c. breakeven chart.

d. process chart.

3. Which of the following is least likely to be included in a customer definition of quality?

a. Reliability

b. Performance

c. Non-value added activities

d. Aesthetics

4. The benchmarking practice in which a product or service is examined using a process known as reverse engineering is:

a. process benchmarking.

b. internal benchmarking.

c. strategic benchmarking.

d. results benchmarking.

5. The benchmarking approach that seeks process performance information from outside the organization’s own industry and which can result in a 35% improvement in performance is

a. Strategic benchmarking.

b. Results benchmarking.

c. Process benchmarking.

d. Internal benchmarking.

6. Which of the following is an important tenet of the total quality management (TQM) philosophy?

a. To dictate continuous improvement for an internal managerial system of planning, controlling, and decision making for continuous improvement

b. To require participation by everyone in the organization

c. To focus on improving goods/services from the customer point of view

d. All of the above are tenets of TQM

7. Which of the following is usually maintained in the database of a customer loyalty system?

a. Frequency of use

b. Customer preferences

c. Credit card data

d. All of the above

8. To win the Malcolm Baldrige National Quality Award, applicants must show excellence in all of the following categories except:

a. leadership.

b. customer focus.

c. cost containment.

d. strategic planning.

9. All of the following are internal benefits of TQM except:

a. Increased customer trust and loyalty

b. Reduced number of errors

c. Increased profitability through reduced costs

d. Increased innovation and acceptance of new ideas

10. The four costs of quality can be classified into two categories:

a. Costs of compliance and costs of assurance

b. Costs of noncompliance and costs of quality failure

c. Costs of compliance and costs of quality failure

d. Internal costs and external costs

11. The four categories of costs associated with product quality costs are:

a. external failure, internal failure, prevention, and carrying.

b. external failure, internal failure, prevention, and appraisal.

c. external failure, internal failure, training, and appraisal.

d. warranty, product liability, prevention, and appraisal.

12. The cost of scrap, rework, and tooling changes in a product quality cost system are categorized as a(n):

a. external failure cost.

b. internal failure cost.

c. training cost.

d. prevention cost.

13. The cost of statistical quality control in a quality cost system is categorized as a(n):

a. appraisal cost.

b. internal failure cost.

c. training cost.

d. prevention cost.

14. All of the following would generally be included in a cost-of-quality report except:

a. warranty claims.

b. design engineering.

c. supplier evaluations.

d. lost contribution margin.

15. Listed below are selected line items from the cost-of-quality report for N Co for the last month:

Category Amount

Rework $ 725

Equipment maintenance 1,154

Product testing 786

Product repair 695

What is N Co’s total prevention and appraisal cost for the last month?

a. $786

b. $1,154

c. $1,940

d. $2,665

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