M3

Question 1

Any instance when a process fails to satisfy its customer

Answer 1

Defect

Question 2

Costs associated with preventing defects before they happen are known as

Answer 2

Prevention Costs

Question 3

Costs incurred when the firm assess the performance level of its processes are known as

Answer 3

Appraisal Costs

Question 4

What are three examples of appraisal costs?

Answer 4

Verification
Quality Audits
Supplier Rating

Question 5

Costs resulting from defects that are discovered during the production of a service or product are known as

Answer 5

Internal Failure Costs

Question 6

What are three examples of internal failure costs?

Answer 6

Rework or rectification
Scrap
Waste

Question 7

Costs that arise when a defect is discovered after the customer receives the service or product are known as

Answer 7

External Failure Costs

Question 8

What are 4 examples of external failure costs?

Answer 8

1) Repairs and servicing of returned and items actually being used by customers
2) Complaints
3) Returns
4) Warranty

Question 9

A written guarantee that the producer will replace or repair defective parts or perform the service to the customer’s satisfaction is known as

Answer 9

Warranty

Question 10

Societal and monetary costs associated with deceptively passing defective services or products to internal or external customers such that it jeopardizes the well-being of stockholders, customers, employees, partners, and creditors are known as

Answer 10

Ethical Failure Costs

Question 11

What are the three elements of deceptive business practices?

Answer 11

1) The conduct of the provider is intentional and motivated by a desire to exploit the customer
2) the provider conceals the truth based upon what is actually known to the provider
3) the transaction is intended to generate a disproportionate economic benefit to the provider at the expense of the customer

Question 12

A philosophy that stresses three principles for achieving high levels of process performance and quality: (1) customer satisfaction, (2) employee involvement, and (3) continuous improvement in performance is known as

Answer 12

Total Quality Management

Question 13

A term used by customers to describe their general satisfaction with a service or product

Answer 13

Quality

Question 14

What does conformance to specifications relate to?

Answer 14

Consistent quality
on-time delivery or delivery speed

Question 15

T/F-How much value a service or product has in the mind of the customer depends on the customer’s expectations before purchasing it.

Answer 15

True

Question 16

Come back to pg 101 and do fitness for use
support
psychological impressions
cultural change

Question 17

A philosophy whereby defects are caught and corrected where they were created is known as

Answer 17

Quality at the Source

Question 18

Small groups of people who have a common purpose, set their own performance goals and approaches, and hold themselves accountable for success are known as

Answer 18

Teams

Question 19

An approach to teamwork that moves responsibility for decisions further down the organizational chart—to the level of the employee actually doing the job is known as

Answer 19

Employee Empowerment

Question 20

What is the Japanese concept for continuous improvement?

Answer 20

Kaizen

Question 21

The philosophy of continually seeking ways to improve processes based on a Japanese concept called kaizen is also known as

Answer 21

Continuous Improvement

Question 22

What is another term to describe the plan-do-study-act cycle?

Answer 22

Deming Wheel

Question 23

A cycle, also called the Deming wheel, used by firms actively engaged in continuous improvement to train their work teams in problem solving is known as

Answer 23

Plan-Do-Study-Act cycle

Question 24

A comprehensive and flexible system for achieving, sustaining, and maximizing business success by minimizing defects and variability in processes is known as

Answer 24

Six Sigma