ISDS Exam 2 Chapter 6

1. Managers at Arnold Palmer Hospital take quality so seriously that the hospital typically is a national leader in several quality areas—so that continuous improvement is no longer necessary.
False
2. An improvement in quality must necessarily increase costs.
False
3. For most, if not all organizations, quality is a tactical rather than a strategic issue.
False
4. The definition of quality adopted by The American Society for Quality is a customer-oriented definition.
True
5. Conforming to standards is the focus of the product-based definition of quality.
False
6. Internal failure costs are associated with scrap, rework, and downtime.
True
7. Philip Crosby is credited with both of these quality catch-phrases: “quality is free” and “zero defects.”
True
8. Deming’s writings on quality tend to focus on the customer and on fitness for use, unlike Juran’s work that is oriented toward meeting specifications.
False
9. Improved quality can increase profitability via flexible pricing.
True
10. ISO 9000 has evolved from a set of quality assurance standards toward a quality management system.
True
11. Quality is mostly the business of the quality control staff, not ordinary employees.
False
12. TQM is important because quality influences all of the ten decisions made by operations managers.
True
13. The phrase Six Sigma has two meanings. One is statistical, referring to an extremely high process capability; the other is a comprehensive system for achieving and sustaining business success
True
14. Continuous improvement is based on the philosophy that any aspect of an organization can be improved.
True
15. Kaizen is similar to TQM in that both are focused on continuous improvement.
True
16. The Japanese use the term “poka-yoke” to refer to continuous improvement.
False
17. Quality circles empower employees to improve productivity by finding solutions to work-related problems in their work area.
True (Total quality management, moderate) {AACSB: Communication}
18. Benchmarking requires the comparison of your firm to other organizations; it is not appropriate to benchmark by comparing one of your divisions to another of your divisions.
False (Total quality management, moderate)
19. Line employees need the knowledge of TQM tools.
True (Total quality management, easy)
20. One of the ways that Just-In-Time (or JIT) influences quality is that by reducing inventory, bad quality is exposed.
True (Total quality management, moderate)
21. The quality loss function indicates that costs related to poor quality are low as long as the product is within acceptable specification limits.
False (Total quality management, moderate)
22. Pareto charts are a graphical way of identifying the few critical items from the many less important ones.
True (Tools of TQM, moderate)
23. A cause-and-effect diagram helps identify the source of a problem.
True (Tools of TQM, moderate)
24. Source inspection is inferior to inspection before costly operations.
False (The role of inspection, moderate)
25. Of the several determinants of service quality, access is the one that relates to keeping customers informed in language they can understand.
False (TQM in services, moderate)
26. High-quality products and services are the most profitable.
True (Defining quality, easy)
27. Which of the following statements regarding Arnold Palmer Hospital is false?
a. The hospital uses a wide range of quality management techniques.
b. The culture of quality at the hospital includes employees at all levels.
c. The hospital scores very highly in national studies of patient satisfaction.
d. The hospital’s high quality is measured by low readmission rates, not patient satisfaction.
e. The design of patient rooms, even wall colors, reflects the hospital’s culture of quality.

d. The hospital’s high quality is measured by low readmission rates, not patient satisfaction.
28. Arnold Palmer Hospital uses which of the following quality management techniques?
a. Pareto charts
b. flow charts
c. benchmarking
d. Just-in-Time
e. The hospital uses all of the above techniques.

e. The hospital uses all of the above techniques.
29. Which of the following statements best describes the relationship between quality management and product strategy?
a. Product strategy is set by top management; quality management is an independent activity.
b. Quality management is important to the low-cost product strategy, but not to the response or differentiation strategies.
c. High quality is important to all three strategies, but it is not a critical success factor.
d. Managing quality helps build successful product strategies.
e. Companies with the highest measures of quality were no more productive than other firms.

d. Managing quality helps build successful product strategies.
30. “Quality is defined by the customer” is
a. an unrealistic definition of quality
b. a user-based definition of quality
c. a manufacturing-based definition of quality
d. a product-based definition of quality
e. the definition proposed by the American Society for Quality

b. a user-based definition of quality
31. “Making it right the first time” is
a. an unrealistic definition of quality
b. a user-based definition of quality
c. a manufacturing-based definition of quality
d. a product-based definition of quality
e. the definition proposed by the American Society for Quality

c. a manufacturing-based definition of quality
32. Three broad categories of definitions of quality are
a. product quality, service quality, and organizational quality
b. user-based, manufacturing-based, and product-based
c. internal, external, and prevention
d. low-cost, response, and differentiation
e. Pareto, Shewhart, and Deming

b. user-based, manufacturing-based, and product-based
33. According to the manufacturing-based definition of quality,
a. quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost
b. quality depends on how well the product fits patterns of consumer preferences
c. even though quality cannot be defined, you know what it is
d. quality is the degree to which a specific product conforms to standards
e. quality lies in the eyes of the beholder

d. quality is the degree to which a specific product conforms to standards
34. The role of quality in limiting a firm’s product liability is illustrated by
a. ensuring that contaminated products such as impure foods do not reach customers
b. ensuring that products meet standards such as those of the Consumer Product Safety Act
c. designing safe products to limit possible harm to consumers
d. using processes that make products as safe or as durable as their design specifications call for
e. All of the above are valid.

e. All of the above are valid.
35. Which of the following is not one of the major categories of costs associated with quality?
a. prevention costs
b. appraisal costs
c. internal failures
d. external failures
e. none of the above; they are all major categories of costs associated with quality

e. none of the above; they are all major categories of costs associated with quality
36. All of the following costs are likely to decrease as a result of better quality except
a. customer dissatisfaction costs
b. inspection costs
c. scrap costs
d. warranty and service costs
e. maintenance costs

e. maintenance costs
37. Which of the following statements is not true?
a. Self-promotion is not a substitute for quality products.
b. Inferior products harm a firm’s profitability and a nation’s balance of payments.
c. Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product.
d. Quality—be it good or bad—will show up in perceptions about a firm’s new products, employment practices, and supplier relations.
e. Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.

c. Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product.
38. “Employees cannot produce goods that on average exceed the quality of what the process is capable of producing” expresses a basic element in the writings of
a. Vilfredo Pareto
b. Armand Feigenbaum
c. Joseph M. Juran
d. W. Edwards Deming
e. Philip B. Crosby

d. W. Edwards Deming
39. “Quality Is Free,” meaning that the costs of poor quality have been understated, is the work of
a. W. Edwards Deming
b. Joseph M. Juran
c. Philip B. Crosby
d. Crosby, Stills, and Nash
e. Armand Feigenbaum

c. Philip B. Crosby
40. The philosophy of zero defects is
a. the result of Deming’s research
b. unrealistic
c. prohibitively costly
d. an ultimate goal; in practice, 1 to 2% defects is acceptable
e. consistent with the commitment to continuous improvement

e. consistent with the commitment to continuous improvement
41. Based on his 14 Points, Deming is a strong proponent of
a. inspection at the end of the production process
b. an increase in numerical quotas to boost productivity
c. looking for the cheapest supplier
d. training and knowledge
e. all of the above

d. training and knowledge
42. Stakeholders who are affected by the production and marketing of poor quality products include
a. stockholders, employees, and customers
b. suppliers and creditors, but not distributors
c. only stockholders, creditors, and owners
d. suppliers and distributors, but not customers
e. only stockholders and organizational executives and managers

a. stockholders, employees, and customers
43. Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to
a. determine whether any of the organization’s stakeholders are violated by poor quality products
b. gain ISO 14000 certification for the organization
c. obtain a product safety certificate from the Consumer Product Safety Commission
d. have the organization’s legal staff write disclaimers in the product instruction booklets
e. compare the cost of product liability to the external failure cost

a. determine whether any of the organization’s stakeholders are violated by poor quality products
44. If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage?
a. 3.4
b. 6.0
c. 34
d. 2700
e. 6 times the monthly standard deviation of passengers

a. 3.4
45. Which of the following is true about ISO 14000 certification?
a. It is not a prerequisite for ISO 9000 certification.
b. It deals with environmental management.
c. It offers a good systematic approach to pollution prevention.
d. One of its core elements is life-cycle assessment.
e. All of the above are true.

e. All of the above are true.
46. Suppose that a firm has historically been achieving “three-sigma” quality. If the firm later changes its quality management practices such that begins to achieve “six-sigma” quality, which of the following phenomena will result?
a. The average number of defects will be cut in half.
b. The specification limits will be moved twice as far from the mean.
c. The average number of defects will be cut by 99.9997%.
d. The average number of defects will be cut by 99.87%.
e. The average number of defects will be cut by 99.73%.

d. The average number of defects will be cut by 99.87%.
47. To become ISO 9000 certified, organizations must
a. document quality procedures
b. have an onsite assessment
c. have an ongoing series of audits of their products or service
d. all of the above
e. none of the above

d. all of the above
48. Total quality management emphasizes
a. the responsibility of the quality control staff to identify and solve all quality-related problems
b. a commitment to quality that goes beyond internal company issues to suppliers and customers
c. a system where strong managers are the only decision makers
d. a process where mostly statisticians get involved
e. ISO 14000 certification

b. a commitment to quality that goes beyond internal company issues to suppliers and customers
49. A successful TQM program incorporates all of the following except
a. continuous improvement
b. employee involvement
c. benchmarking
d. centralized decision-making authority
e. none of the above; a successful TQM program incorporates all of the above

d. centralized decision-making authority
50. “Kaizen” is a Japanese term meaning
a. a foolproof mechanism
b. just-in-time (JIT)
c. a fishbone diagram
d. setting standards
e. continuous improvement

e. continuous improvement
51. Which of the following statements regarding “Six Sigma” is true?
a. The term has two distinct meanings—one is statistical; the other is a comprehensive quality system.
b. Six Sigma means that about 94 percent of a firm’s output is free of defects.
c. The Six Sigma program was developed by Toyota in the 1970’s.
d. The Six Sigma program is for manufacturing firms, and is not applicable to services.
e. Six Sigma certification is granted by the International Standards Organization (ISO).

a. The term has two distinct meanings—one is statistical; the other is a comprehensive quality system.
52. Quality circles members are
a. paid according to their contribution to quality
b. external consultants designed to provide training in the use of quality tools
c. always machine operators
d. all trained to be facilitators
e. none of the above; all of the statements are false

e. none of the above; all of the statements are false
53. Techniques for building employee empowerment include
a. building communication networks that include employees
b. developing open, supportive supervisors
c. moving responsibility from both managers and staff to production employees
d. building high-morale organizations
e. All of the above are techniques for employee empowerment.

e. All of the above are techniques for employee empowerment.
54. Building high-morale organizations and building communication networks that include employees
are both elements of
a. ISO 9000 certification
b. Six Sigma certification
c. employee empowerment
d. Taguchi methods
e. the tools of TQM

c. employee empowerment
55. The process of identifying other organizations that are best at some facet of your operations and
then modeling your organization after them is known as
a. continuous improvement
b. employee empowerment
c. benchmarking
d. copycatting
e. patent infringement

c. benchmarking
56. ISO 9000 seeks standardization in terms of
a. products
b. production procedures
c. suppliers’ specifications
d. procedures to manage quality
e. all of the above

d. procedures to manage quality
57. Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the
a. Taguchi Loss Function
b. Pareto chart
c. ISO 9000 Quality Cost Calculator
d. process chart
e. none of the above

a. Taguchi Loss Function
58. A quality loss function includes all of the following costs except
a. the cost of scrap and repair
b. the cost of customer dissatisfaction
c. inspection, warranty, and service costs
d. sales costs
e. costs to society

d. sales costs
59. Pareto charts are used to
a. identify inspection points in a process
b. outline production schedules
c. organize errors, problems, or defects
d. show material flow
e. all of the above

c. organize errors, problems, or defects
60. The “four Ms” of cause-and-effect diagrams are
a. material, machinery/equipment, manpower, and methods
b. material, methods, men, and mental attitude
c. named after four quality experts
d. material, management, manpower, and motivation
e. none of the above

a. material, machinery/equipment, manpower, and methods
61. Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events
through which a product travels is a
a. Pareto chart
b. process chart
c. check sheet
d. Taguchi map
e. poka-yoke

b. process chart
62. The process improvement technique that sorts the “vital few” from the “trivial many” is
a. Taguchi analysis
b. Pareto analysis
c. benchmarking
d. Deming analysis
e. Yamaguchi analysis

b. Pareto analysis
63. A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using
a. a Pareto chart
b. a scatter diagram
c. a Taguchi loss function
d. a cause and effect diagram
e. a flow chart

a. a Pareto chart
64. A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of categories. This is most closely related to the ____________ tool of TQM.
a. Taguchi loss function
b. cause and effect diagram
c. scatter diagram
d. histogram
e. process control chart

b. cause and effect diagram
65. A manager tells her production employees, “It’s no longer good enough that your work fall anywhere within the specification limits. I need your work to be as close to the target value as possible.” Her thinking is reflective of
a. internal benchmarking
b. Six Sigma
c. ISO 9000
d. Taguchi concepts
e. process control charts

d. Taguchi concepts
66. A fishbone diagram is also known as a
a. cause-and-effect diagram
b. poka-yoke diagram
c. Kaizen diagram
d. Kanban diagram
e. Taguchi diagram

a. cause-and-effect diagram
67. If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is
a. in control, but not capable of producing within the established control limits
b. out of control and the process should be investigated for assignable variation
c. within the established control limits with only natural causes of variation
d. monitored closely to see if the next sample mean will also fall outside the control limits
e. none of the above

b. out of control and the process should be investigated for assignable variation
68. A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings?
a. Ishikawa diagram
b. Pareto chart
c. process chart
d. control charts
e. activity chart

a. Ishikawa diagram
69. When a sample measurement falls inside the control limits, it means that
a. each unit manufactured is good enough to sell
b. the process limits cannot be determined statistically
c. the process output exceeds the requirements
d. if there is no other pattern in the samples, the process is in control
e. the process output does not fulfill the requirements

d. if there is no other pattern in the samples, the process is in control
70. Which of the following is false regarding control charts?
a. Values above the upper control limits always imply that the product’s quality is exceeding expectations.
b. Control charts are built so that new data can be quickly compared to past performance data.
c. Control charts graphically present data.
d. Control charts plot data over time.
e. None of the above is false.

a. Values above the upper control limits always imply that the product’s quality is exceeding expectations.
71. The goal of inspection is to
a. detect a bad process immediately
b. add value to a product or service
c. correct deficiencies in products
d. correct system deficiencies
e. all of the above

a. detect a bad process immediately
72. Which of the following is not a typical inspection point?
a. upon receipt of goods from your supplier
b. during the production process
c. before the product is shipped to the customer
d. at the supplier’s plant while the supplier is producing
e. after a costly process

e. after a costly process
73. A good description of “source inspection” is inspecting
a. materials upon delivery by the supplier
b. the goods at the production facility before they reach the customer
c. the goods as soon as a problem occurs
d. goods at the supplier’s plant
e. one’s own work, as well as the work done at the previous work station

e. one’s own work, as well as the work done at the previous work station
74. “Poka-yoke” is the Japanese term for
a. card
b. foolproof
c. continuous improvement
d. fishbone diagram
e. just-in-time production

b. foolproof
75. What refers to training and empowering frontline workers to solve a problem immediately?
a. just-in-time
b. poka-yoke
c. benchmarking
d. kaizen
e. service recovery

e. service recovery
76. A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson’s ability to explain the car’s features, the salesperson’s friendliness, and the dealer’s honesty. The dealership should be especially concerned with which determinants of service quality?
a. communication, courtesy, and credibility
b. competence, courtesy, and security
c. competence, responsiveness, and reliability
d. communication, responsiveness, and reliability
e. understanding/knowing customer, responsiveness, and reliability

a. communication, courtesy, and credibility
77. Marketing issues such as advertising, image, and promotion are important to quality because
a. they define for consumers the tangible elements of a service
b. the intangible attributes of a product (including any accompanying service) may not be defined by the consumer
c. they educate consumers on how to use the product
d. they make the product seem more valuable than it really is
e. they raise expenses and therefore decrease profitability

b. the intangible attributes of a product (including any accompanying service) may not be defined by the consumer
78. Which of the determinants of service quality involves having the customer’s best interests at heart?
a. access
b. courtesy
c. credibility
d. responsiveness
e. tangibles

c. credibility
79. Which of the determinants of service quality involves performing the service right the first time?
a. access
b. courtesy
c. credibility
d. reliability
e. responsiveness

d. reliability

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