Business Results

Question 1

1. In order to drive performance, the organization must create value for lean within the organization’s culture. Which of the following factors enables the organization to create lean value?

A. A visual management system that makes problems visible.
B. A technical resource center.
C. Outsourcing of logistical supply operations.
D. Purchasing additional exercise equipment for employees.

Answer 1

1. Answer: A - A visual management system that makes problems visible enables the organization to create lean value. Common factors that drive the organizational lean culture include building awareness, building desires, providing information and lean knowledge, holding leadership accountable, evaluating the culture, and building the organization’s lean abilities and skills

Question 2

2. To drive business results for the organization, you must measure what matters to the customer. Which of the following choices would NOT be a form of “voice of the customer” data collection?
   A. Customer surveys.
   B. Media advertising.
   C. Product focus groups.
   D. Personal inquiry by employees.

Answer 2

2. Answer: B - Media advertising would not be a form of “voice of the customer” data collection. The voice of the customer helps prioritize what the customer desires. Media advertising may be used for customer persuasion, but the advertising itself has no data collection methods. ROl for advertising would be measured using surveys, focus groups, or inquiries.

Question 3

3. A trigger event occurs when a condition exceeds established process parameters, values, or normal conditions. Once a trigger event has occurred, what is the next step?
   A. To determine if the process error was human in nature.
   B. To determine what condition requires an immediate response.
   C. To determine if the event was caused by equipment error or maintenance.
   D. To begin collection of data on the process parameters.

Answer 3

3. Answer: B - Once a trigger event has occurred, the next step in a trigger event is to determine what condition requires an immediate response. The next step is to determine if the trigger requires the process to be shut down.
   When control limits are exceeded, a lack of immediate data may not be available to readily determine jidoka. Statistical process control techniques such as Individual-Moving Range charts, P charts, and U charts are used to monitor and manage product quality and identify trigger events.

Question 4

4. Normal conditions are those we expect to meet a certain standard.
   Abnormal conditions are those which do not meet the standard.
   Which of the following factors does NOT impact a reaction to abnormal conditions?
   A. An employee is assigned ownership for the abnormal condition.
   B. Visual indicators make the abnormal condition easily visible.
   C. The standard must be known by employees and followed.
   D. No set standard of identification is required.

Answer 4

4. Answer: D - Not setting a standard of identification impacts a reaction to abnormal conditions. Written standards, visual indicators, or process parameters need to be clearly identified; otherwise employees arbitrarily determine abnormal conditions.

Question 5

5. Waste is identified as anything that does not add value to a product or process. Lean measurements reveal waste in processes.
   Which of these statements is incorrect concerning guidelines for lean measurements?
   A. What gets measured in lean gets done.
   B. Flow requires measuring process times.
   C. Financial measurements can substitute for lean metrics.
   D. Lean measurements should be real-time measurements, not averages over months, quarters, or years.

Answer 5

5. Answer: C - Financial measurements cannot be substituted for lean metrics. Financial measures are reported after the fact as a result. A financial indicator cannot be used to lean a process; it can only be used to show the result.

Question 6

6. Understanding customer demand and characteristics requires understanding of the “pull” of customers. Customer demand affects which of the following?
   A. Kanban quantities.
   B. Determination of Takt time.
   C. Both A and B.
   D. Process capability for attributes.

Answer 6

6. Answer: C - Customer demand affects both Kanban quantities and the determination of Takt time in an operation.

Question 7

7. Several factors may affect company business results and customer retention. Which of the following does NOT impact customer retention?
   A. The level of customer service.
   B. Provision of incentives such as samples.
   C. Requesting feedback for what the customer wants.
   D. Analysis of competing companies.

Answer 7

7. Answer: D - An analysis of competing companies does not impact customer retention in terms of the voice of the customer. The level of customer service, provision of incentives such as samples, and requesting feedback for what the customer wants all impact customer retention. However, an analysis of a competing company may give insight as to how the other company approaches customer retention.

Question 8

8. Lean waste measurements impact a business’s bottom line. Which factor given below can hide quality defects by increasing the time between the creation of a defect and when it is discovered?
   A. Inaccurate calculations of the total cost of production.
   B. Incorrectly managed cycle time.
   C. An employee who is not properly trained.
   D. A high level of inventory.

Answer 8

8. Answer: D - A high level of inventory can hide quality defects by increasing the time between the creation of a defect and when it is discovered. This hidden defect increases the likelihood the problem will be repeated. In this type of environment employees can impact the product while it is in process and before it is placed in the inventory.

Question 9

9. Employees have to be developed to improve their capability with lean and sustain lean improvements. Which of the following is NOT an action management would take to be viewed as supportive in terms of “people development measures”?
   A. Assessing the lead time in the production environment.
   B. Assessing the management environment for the level of lean engagement.
   C. Identifying and optimizing competencies required for lean.
   D. Describing roles and problem-solving responsibilities in the strategic context

Answer 9

9. Answer: A. Assessing lead time in the production environment is NOT an action management would take to be viewed as supportive in terms of “people development measures.” Lead time assessment is not a people development measure, it is a process measure.

Question 10

10. Which quality measure for business results would be used to measure repetitive wear and tear on employees working on an assembly line?
    A. Ergonomic management.
    B. Targeted training hours.
    C. Days worked without a lost time accident.
    D. Reportable incidents.

Answer 10

10. Answer: A - Ergonomic management would be used to measure repetitive wear and tear on employees working on an assembly line. Safety is a quality measure for business results. Ergonomic management is a key indicator of quality for production management.

Question 11

11. Lean cost and productivity measurements may include employee labor productivity and individual or group sales productivity.
    Calculate the number of products produced per hour by a factory that produced 16,000 items with 8 employees working 8-hour shifts 5 days per week, with a total of 40 hours each per week, for 4 weeks.
    A. 16 products per hour
    B. 12.5 products per hour
    C. 42 products per hour
    D. 7 products per hour

Answer 11

11. Answer: B - When you calculate the number of products produced per hour by a factory that produced 16,000 items with 8 employees working one eight-hour shift five days per week, with a total of forty hours each, the result is 12.5 products per hour. This is calculated by dividing the number of products by the total work hours of the employees over the four-week period.
    The total work hours are equal to 8 employees × 40 hours per week × 4 weeks, which equals 1280 hours. Divide 16,000 items by 1280 and the answer is 12.5 products per hour.

Question 12

12. Lean measurements such as safety, quality, financial, employee, and responsiveness have a competitive impact in corresponding balanced scorecard measures. What measure would include the amount of manufacturing space used?
    A. Lean quality measurements.
    B. Lean responsiveness measurements.
    C. Lean financial measurements.
    D. Lean safety measurements.

Answer 12

12. Answer: C - Lean financial measurements include the amount of manufacturing space used. Manufacturing space used translates into overhead costs. Lean financial costs also include the margin costs and the conversion costs, which are the labor costs per unit of product.

Question 13

13. Lean metrics typically fall into the two categories of results or drivers. What do driver metrics tell you?
    A. Behavior changes which need to be made down the road.
    B. Future operational planning parameters.
    C. Financial indicators, both positive and negative.
    D. Immediate feedback on how a process is running.

Answer 13

13. Answer: D - Driver metrics tell you immediate feedback on how a process is running. Driver metrics allow you to make immediate changes in an identified measure, whereas result metrics are reported after the fact and require analysis to determine the cause.

Question 14

14. Alignment of lean requires good measurement systems. A Measurement System Analysis (MS) is a designed experiment that seeks to identify the components of variation in the measurement.
    Which of the following is NOT considered in a Measurement Systems
    Analysis?
    A. Determining the design of experiments.
    B. Assessing procedures and operators.
    C. Assessing the measuring device.
    D. None of the above are considered in a Measurement Systems Analysis.

Answer 14

14. Answer: A - Determining the design of experiments is not considered in a Measurement Systems Analysis. The Measurement Systems Analysis includes selecting the correct measurement and approach, assessing procedures and operators, and assessing the measuring device. An experiment is typically designed to test a process, but is not a step in an MSA.

Question 15

15. Measures and measurement systems are interdependent.
    Individual measures are tested in the measurement system to develop an analysis. Which metric element requires that the exact calculation of the metric be known?
    A. The frequency of the measure.
    B. The objective of the measure
    C. The unit of the measure.
    D. The formula for the measure.

Answer 15

15. Answer: D - The formula for the measure requires that the exact calculation of the metric be known. Objective metric elements require that organizational objectives must be clear for the metric. Unit metrics require that the measuring units be defined. The frequency metric element requires that the recording and reporting periods for the metric are predetermined.

Question 16

16. Internal measures should be aligned with the voice of the customer (VOC). Which of the following exaropies would provide a supporting measure for the voice of the customer?
    A. Improvement ideas from employees.
    B. A reduction in the cost of production labor.
    C. Increased cost of input supplies.
    D. Success of new products.

Answer 16

16. Answer: D - Success of new products would provide a supporting measure for the voice of the customer. Key measures for the voice of the customer would include market share and customer surveys. Supporting measures confirm what is measured by key measures.

Question 17

17. Lean employees should be measuring the results of the “whole” system. Which of the following measures would be an example of a
    measure as a “whole”?
    A. A workplace safety board which shows lost work days at 0.
    B. A visual board in a break room which shows monthly productivity, customer satisfaction, and injury rates.
    C. A quality improvement A3 which shows first pass yield results for the
    month of January.
    D. Customer satisfaction numbers for the month of March are displayed at the entrance to the factory.

Answer 17

17. Answer: B - A visual board in a break room which shows monthly productivity, customer satisfaction, and injury rates would be an example of a measure as a “whole.” It not only shows production and customer satisfaction, but also elements of supporting measures such as safe work. Combined, these show the “whole” system.

Question 18

18. Removing waste reduces lead time. When measuring waste in a process what is the lead time of that process?
    A. The amount of time from order to initial processing
    B. The sum of all the value-added and non-value-added steps in a process.
    C. The total time on the production line.
    D. The total time on the production line minus down time.

Answer 18

18. Answer: B - The lead time of a process is the sum of all the value-added the and non-value-added steps in a process. The lead time of a process provides
    the most accurate time for production to determine which non-value-added steps to eliminate.

Question 19

19. Measuring flow requires measuring the time a process or a product takes from start to finish. This involves managing bottlenecks and constraints, as well as which of the following?
    A. Aligning similar processes, cross training employees, and sharing employee resources.
    B. Performing incremental tests of change using the plan, do, study, act (PDSA) cycle.
    C. Showing humility to employees.
    D. A and B.

Answer 19

19. Answer: D - Measuring flow requires managing bottlenecks and soft constraints, aligning similar processes, cross training employees, and sharing employee resources while performing incremental tests of change using the plan, do, study, act (PDSA) cycle.

Question 20

20. Lean accounting measurement is used to support lean thinking within the organization. In traditional accounting, waste is hidden.
    Which of the following is NOT one of the ways in which traditional accounting measures hide waste?
    A. Incorrect standards.
    B. Inadequate reporting in production, design, or sales.
    C. Incorrect accounting formats.
    D. Overhead allocations for the organization.

Answer 20

20. Answer: C - Incorrect accounting formats is not one of the ways in which traditional accounting measures hide waste. The formats are consistent with accounting principles in lean and traditional accounting. The difference is that traditional accounting does not use lean principles in exposing waste.

Question 21

21. Measuring the voice of the customer helps an organization validate customer expectations, requirements, and unhappiness with current processes. When performing a Voice of the Customer Analysis, which example would be a form of “reactive data”?
    A. Complaints or comment cards.
    B. Customer interviews.
    C. Product focus groups.
    D. Customer surveys.

Answer 21

21. Answer: A - When performing a Voice of the Customer Analysis, complaints or comment cards would be a form of “reactive data.” Reactive data is data which provides instant feedback, as complaints or comments are received instantaneously after a product sale, whereas a survey, interview, or focus group would have a delayed effect.

Question 22

22. Measuring goals and objectives for service industries may require developing metrics for service. Which of the following would be considered a service metric?
    A. A frozen dinner takes less than 3 minutes to microwave.
    B. A wait time on the phone of less than 15 seconds.
    C. An assembly line processes a package of cereal in 1.8 minutes.
    D. A copy job takes 7 minutes to print.

Answer 22

22. Answer: B - A wait time on the phone of less than 15 seconds would be considered a service metric because it minimizes the variation or the standard deviation so the customer can expect service that does not vary from operator to operator, thus ensuring a more positive experience. The copy job, cereal processing, and frozen dinner cook time are examples of product metrics.

Question 23

23. The SMART acronym is use by organizations to develop objectives. Under SMART, how do you know when a goal is achieved?
    A. You can tell when it has been achieved because you have a way to measure completion.
    B. You have specific aims employees shoot for.
    C. You have a deadline which helps people focus on the tasks required for the goal.
    D. You know resources and time were taken into account to ensure the goals are achievable.

Answer 23

23. Answer: A - Under SMART, you know when a goal is achieved because you have a way to measure completion. SMART goals are specific, measurable, attainable, realistic, and timely.

Question 24

24. Measurements should be tied to the customer and their desires.
    The desires of the customer impacts whether your product meets their needs. Which of the following questions would you NOT consider to be an interview question for a Voice of the Customer Analysis?
    A. What would threaten the potential of you doing future business with us?
    B. Why should we continue to do business with you?
    C. What do you like about our current processes?
    D. What do you feel needs improvement in our current processes?

Answer 24

24. Answer: B - “Why should we continue to do business with you?” would not be considered to be an interview question for a Voice of the Customer Analysis. The wording seems condescending and does not imply that the interviewer is focused on the needs of the customer.

Question 25

25. Measurements should be analyzed to determine their precision.
    The precision of measurements is affected by confidence intervals.
    Using the statistical definition of the 95 percent confidence interval,
    if a poll of 100 people were taken
    A. Five percent of respondents would be within the calculated confidence intervals and 95 percent would be either higher or lower than the range of the confidence intervals.
    B. 95 percent of respondents would be within the calculated confidence intervals and only one percent would be higher than the range of the confidence intervals.
    C. 95 percent of respondents would be within the calculated confidence intervals and ten percent would be lower than the range of the confidence intervals.
    D. 95 percent of respondents would be within the calculated confidence intervals and five percent would be either higher or lower than the range of the confidence intervals.

Answer 25

25. Answer: D - Using the statistical definition of the 95 percent confidence interval, if a poll of 100 people were taken, 95 percent of respondents would be within the calculated confidence intervals and five percent would be either higher or lower than the range of the confidence interals

Question 26

26. Reporting of measurements helps to speed improvements. The most effective measurement factors would include which of the following?
    A. The ability to replicate data.
    B. Using the most number of data sources possible.
    C. Reliability of the measures of the system.
    D. The ability to reproduce gage.

Answer 26

26. Answer: C - The most effective measurement factors would include reliability. Reliability helps establish the baseline and provide a comparison of how reliable subsequent measures are. Effective measurements are useful, reliable, timely, and come from reliable sources with adequate level of detail.

Question 27

27. Visual feedback on key measures should be provided to employees in real time. The information in the real time feedback will include all of the following EXCEPT:
    A. The key metrics being measured.
    B. The target value of the measures.
    C. Possible process improvement initiatives.
    D. Data source and the data collector.

Answer 27

27. Answer: C - Visual feedback provides information in real time and includes the key metrics being measured, the target value of the measures, the data source, the data collector, collection method, and frequency. Visual feedback for performance does not include possible process improvement initiatives.

Question 28

28. Which of the following key lean measures for quality includes the measure of potential process capability?
    A. Defects per unit.
    B. The ratio of the six sigma spread of a process distribution to the tolerance of the distribution, also known as Cp.
    C. Cpk, which is calculated by dividing the distance of the process mean to the nearest tolerance limit by 3 standard deviations of the process.
    D. A Defects Per Million Opportunities (DPMO).

Answer 28

28. Answer: B - Cp is the measure of potential process capability. It shows the six sigma spread of a process distribution to the tolerance of the distribution. Cp is a measure of the actual process capability. First Pass Yield is the percentage of units that meet specifications without rework. Defects Per Million Opportunities (DPMO) compares processes by comparing the capability of each process.

Question 29

29. Rework measures are critical to operationally monitoring the level of waste caused by having to redo or rework a product. What does a First-Time-Through (FTT) rework measure?
    A. The effectiveness of the cell’s standardized work.
    B. The accuracy of measurements for the process.
    C. The attention to detail for employees.
    D. Costs of products scrapped because they require rework.

Answer 29

29. Answer: A - A First-Time-Through (FTT) rework measures both the effectiveness of the cell’s standardized work and the percentage of product made without any need for rework or scrap. FT is calculated by taking the total units processed minus rejected or reworked products and dividing the result by the total units processed.

Question 30

30. Overall Equipment Effectiveness is a composite metric for first pass yield. If 100 units of product are processed and 97 are completed to the required specifications with 4 requiring rework, calculate the first pass yield.
    A. The first pass yield is 100%.
    B. The first pass yield is 96%.
    C. The first pass yield is 97%.
    D. The first pass yield is 93%.

Answer 30

30. Answer: D - If 100 units of product are processed and 97 are completed vents an
    to the required specifications with 4 requiring rework, the first pass yield is
    93%. This is calculated as (97-4) / 100 = .93 = 93%.

Question 31

31. Which of the following key lean measures for delivery is the time from the customer order until they receive the product?
    A. Total lead time.
    B. On-time delivery.
    C. The processing cycle time.
    D. The reorder rate.

Answer 31

31. Answer: A - Total lead time is the time from the customer order until they receive the product. On time delivery, total lead time, schedule attainment, customer satisfaction, and processing cycle time are the most recommended delivery measures for business results.

Question 32

32. Takt time is a measure which calculates the longest period of time that can be spent processing a unit of product while still meeting the level of demand. Which of these steps is NOT included in the calculation of Takt time?
    A. Calculating cycle time against Takt time.
    B. Calculation of the demand in days, weeks, or months.
    C. Calculation of the total available time.
    D. Calculation of the delivery time.

Answer 32

32. Answer: D - Calculation of the delivery time is NOT included in the calculation of Takt time. Takt time calculates the longest period of time that can be spent processing a unit of product while still meeting the level of demand. It is determined by calculating demand, available time, the Takt time, and then used then used to value stream map Takt time at each activity step.

Question 33

33. Cycle time is a key lean measurement in supply chain management and in lean enterprise planning. Which of the following is a measure of production cycle time?
    A. It begins when an online order is placed and ends when sent to the production floor.
    B. It begins when an order is released on the production floor and ends when the product is available for shipment to the customer.
    C. It begins when the production line starts to move and ends when the customer signs for the product.
    D. The total of each separate time in the cycle to produce the good.

Answer 33

33. Answer: B - Production cycle time begins when an order is released on the production floor and ends when the product is available for shipment to the customer. Each individual process may have a cycle time, but the production cycle begins with an order release and ends when the order is ready for shipment.

Question 34

34. Lead time is the total time required to manufacture a product, including the order preparation time, queue time, setup time, process time, movement within factory, inspection time, and placement in inventory. An inventory cycle begins once a product is placed in inventory. The number of times that inventory cycles per year is known as which of the following:
    A. Cycle time of the process.
    B. Inventory turn.
    C. Manufacturing lead time.
    D. TAKT Time.

Answer 34

34. Answer: B - Once a product is placed in inventory, the number of times that inventory cycles per year is the inventory turn. Inventory turn is one of
    fidente the four key lean measures for lead time, along with cycle time,
    manufacturing lead time, and TAKT Time.

Question 35

Which of the following lean cost metrics would a process team be reviewing if they were comparing spending and wanted to know the current assets divided by the current liabilities?
A. The amount of working capital.
B. The overhead spending.
C. Team productivity and efficiency.
D. Organization cash flow.

Answer 35

35. Answer: A - If a process team were reviewing spending and wanted to know the current assets divided by the current liabilities, they would be looking at the working capital lean costs metric. Lean cost metrics include the amount of working capital, team productivity and efficiency, cash flow, space requirements, and ROI calculations.

Question 36

36. A Six Sigma Greenbelt is calculating key lean measures for inventory turns. Which inventory turn measure is calculated by adding beginning inventory and inventory purchases then subtracting the ending inventory?
    A. Cost of Goods Sold.
    B. Inventory Turnover Ratio.
    C. Average Inventory.
    D. Calculation of Inventory Turnover Ratio.

Answer 36

36. Answer: A - Cost of Goods Sold is the inventory turn measure calculated by adding beginning inventory and inventory purchases then subtracting the ending inventory. Key lean measures for inventory turns include Calculation of Inventory Turnover Ratio, Average Inventory, Inventory Turnover Ratio, and Cost of Goods Sold.

Question 37

37. Queue times are important lean measures in processing times.
    There are five elements of the cycle time of a process: run time, queue time, move time, wait time, and setup time. Of these choices, which one is the only value-added time?
    A. Queue time of a process.
    B. Setup time of a process.
    C. Move time of a process.
    D. Run time of a process.

Answer 37

37. Answer: D - In queue times, the only value-added time is run time.

Question 38

38. A hospital is trying to improve patient flow through a chartered process team. Which of these will NOT improve the flow?
    A. Set up of a discharge unit.
    B. Limit the use of access entry points.
    C. Limit hours of operation.
    D. Use visit pre-planning.

Answer 38

38. Answer: C - Limiting the hours of operation will not improve the flow.
    Expansion of hours will improve the flow, but will increase economic costs proportionally.

Question 39

39. Which key lean measure for “delays” would be affected if special packaging or pallets were required to ship a good?
    A. Outside Processing Time.
    B. Shipping Transit Time to Customer.
    C. Process Time for Individual Step.
    D. Material Lead Time.

Answer 39

39. Answer: B - If special packaging or pallets were required to ship a good it would affect the “Shipping Transit Time to Customer.” These are avoidable delays in logistical or transportation methods. Other lean delay measures include Material Lead Time, Outside Processing Times, and Process Time for Individual Step.

Question 40

40. The performance factor for Overall Equipment Effectiveness (OEE)
    is the speed with which the machine or process produces products compared to the design speed or normal operating cycle. Which of the following correctly shows the formula for OEE?
    A. Availability × Performance × Quality.
    B. Opportunity × Precision × Errors.
    C. Time/Down Time × Cost.
    D. Error Rate × Throughput.

Answer 40

40. Answer: A - Availability × Performance × Quality is the formula for Overall Equipment Effectiveness (OEE). OEE uses the three sources of manufacturing productivity loss(availability, performance and quality), and creates metrics that show the effectiveness of a machine or process.

Question 41

41. Changeover time is a critical lean measure in processing plants and manufacturing environments. SMED (Single-Minute Exchange of Dies) is a system for reducing the time it takes to complete equipment changeovers. Which of the following is NOT one of the benefits of SMED?
    A. Larger lot sizes with faster changeovers.
    B. Lower inventory levels.
    C. Improved response to customer demand.
    D. Lower manufacturing costs.

Answer 41

41. Answer: A - Larger lot sizes with faster changeovers is not a benefit.
    Smaller lot sizes are a benefit because faster changeovers result in more frequent product changeover.

Question 42

42. Lean measures which have financial impact are those that create cost reduction, inventory reduction, or increased revenue. Which measure would be used if the hourly wage rate is computed and counted each time a process is executed?
    A. The financial impact of errors.
    B. The financial impact of inventory.
    C. The financial impact of revenue.
    D. The financial impact of time.

Answer 42

42. Answer: D - The financial impact of time would be used if the hourly wage rate is computed and counted each time a process is executed. Each time the process is executed, the net savings in time is attributed to financial benefits. This measures personnel time needed before and after an improvement.

Question 43

43. Typical measures for cash flow include Net Present Value (NV), Return on Investment (ROl), and internal Rate of Return (IRR). What is the formula for productivity?
    A. Productivity = (T-OE)/I
    B. Productivity = T-OE
    C. Productivity = TOE
    D. Productivity = T/OE

Answer 43

43. Answer: D - Productivity = T/OE is the formula for productivity. T=
    Throughput and OE = Operating Expense. Throughput is the rate at which the
    system generates cash though sales revenue.

Question 44

44. Customer satisfaction is the main goal of lean. Which of the following is NOT included in the lean measures for customer satisfaction?
    A. Attribute Satisfaction Measurements.
    B. Cost Savings Measurement.
    C. Loyalty Measurement.
    D. Intention to Repurchase Measurements.

Answer 44

44. Answer: B - Cost Savings Measurement is not included in the lean measures for customer satisfaction. Lean measures for customer satisfaction measure the overall satisfaction in overall quality, perceived reliability, and needs fulfillment. These in turn formulate the measures of Attribute Satisfaction Measurements, Loyalty Measurement, and Intention to Repurchase Measurements.

Question 45

45. The Role of Performance Measurement is to provide all of the following EXCEPT:
    A. Determine behavior.
    B. Information for decision making.
    C. External communication with stakeholders.
    D. Closing the gap between planned and actual performance.

Answer 45

45. Answer: A - The Role of Performance Measurement is to provide information for decision making, external communication with stakeholders, and to close the gap between planned and actual performance.

Question 46

46. Strategic lean metrics include return on capital, revenue, cash flow, and market position. Dr. Genichi Taguchi was a Japanese engineer and statistician whose work determined what product specification meant and how it could be applied to a cost effective production. Taguchi Product Development includes three stages.
    Which of the following is NOT included?
    A. Finding the balance between manufacturing unit cost profit and loss.
    B. Organizational strategic planning.
    C. System designs.
    D. Determining how the product should perform.

Answer 46

46. Answer: B - Organizational strategic planning is not included in Taguchi Product Development. Taguchi worked in Just In Time (IT) production, which is a production strategy that strives to improve a business return on investment by reducing in-process inventory and associated carrying costs.
    Impacting these lean metrics affects the bottom line in return on capital, revenue, cash flow, and market position.

Question 47

47. The desired characteristics of Performance Measurement Systems would include all of the following EXCEPT?
    A. Should supporting the strategic intentions of the organization.
    B. Should be easily understood by employees.
    C. Should not include both drivers and results for activities.
    D. Should include visual indicators.

Answer 47

47. Answer: C - Both drivers and results for activities should be included in characteristics of Performance Measurement Systems, Performance measures should be intuitive and easily recognizable by employees.

Question 48

48. Regression analysis is be used to build process models, as well as which of the following?
    A. Prioritize relationships between variables
    B. Determine potential causes
    C. Anticipate potential problems
    D. Indicate the measures of the KPI

Answer 48

48. Answer: A - Regression analysis is used to build process models and prioritize relationships between variables. Regression models are used for estimation and prediction, to analyze the uncertainty in the estimate, and perform a residuals analysis to validate the model.

Question 49

49. Which tool used in management decisions to build the improvement strategy includes a quadrant-based tool of performance measures?
    A. Organizational benchmarking.
    B. ISO 9000.
    C. A Gap Analysis.
    D. A balanced scorecard.

Answer 49

49. Answer: D - A balanced scorecard is used to build improvement strategy and includes a quadrant-based tool of performance measures. Balanced scorecards explain how customers see an organization, as well as what an organization must improve, how it creates value, and what its shareholders think of its operations.

Question 50

50. The concept of “time economy” for quality improvement teams typically leads to all of the following EXCEPT:
    A. Reduced data collection costs
    B. Too much information
    C. Slow data collection process
    D. Data management issues

Answer 50

50. Answer: A - The concept of “time economy” for quality improvement teams typically leads to data management issues, a slow data collection
    process, and too much information. It does not lead to reduced data collection costs. The time economy approach is usually justified as “pull all of the possible data for potential use.” If the process data has been pulled, the data should be thorough.