Question 1

Chapter 17 presents (as Exhibit 17.3) a framework that can be used as the basis for creating a comprehensive system for managing and controlling quality.
Required:
Provide an overview of the key elements of the framework presented in the chapter.

Accepted Answer

The answer of Chapter 17 presents (as Exhibit 17.3) a...

Question 2

Kray Co. manufactures high-quality knives for use in the meat processing industry, and operates in an industry that values and rewards consistent production quality. Technical innovation over the past decade has given the industry a good supply of high-quality steel in raw material form. Kray Co. recognizes the need to establish and maintain strong quality controls for labor activities. A company quality team has asked you to assist the company in recommending either a goalpost conformance quality plan or an absolute quality conformance plan to monitor its manufacturing activities.
Required:
1. Briefly distinguish between the two approaches to ensuring conformance with production standards.
2. Explain how the Taguchi Quality Loss Function (QLF) operates within the absolute quality conformance plan.
3. Do you think worker reaction to the two plans in Part (1) above might be different? Why or why not?

Accepted Answer

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Question 3

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

Accepted Answer

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Question 4

List three examples of quality improvement initiatives in a manufacturing facility that would lead to increased sales productivity.
Answer:  Three examples (among other possible answers) of quality improvement initiatives leading to increased productivity are:

Accepted Answer

The answer of List three examples of quality improvement initiatives...

Question 5

ISO certification is a key component of a firm's efforts to improve quality and compete successfully.
Required:
What must an organization demonstrate, in terms of its operating processes, to become ISO-9000 certified?

Accepted Answer

The answer of ISO certification is a key component of...

Question 6

The cost of scrap, rework, and tooling changes in a Cost of Quality (COQ) Report are properly categorized as a(n):
A) Training cost.
B) External failure cost.
C) Prevention cost.
D) Internal failure cost.
E) Appraisal cost.

Accepted Answer

Scrap, rework, and tooling changes represent defects that have already occurred in the production process, making them examples of internal failure costs in a Cost of Quality (COQ) Report. These costs relate to the expenses incurred to correct or dispose of defective products, such as time and effort spent on repair or replacement of the non-conforming products.

Question 7

Statistical quality control often involves the use of control charts, whose basic purpose is to:
A) Determine when accounting control procedures are not working.
B) Control labor costs in production operations.
C) Control internal audit confirmation responses.
D) Monitor internal administrative control applications in EDP (electronic data processing) operations.
E) Detect performance trends away from normal operations.

Accepted Answer

The basic purpose of control charts is to detect performance trends away from normal operations, which is a key aspect of statistical quality control. The other choices do not accurately describe the purpose of control charts.

Question 8

The cost of using a statistical quality control system is properly characterized in a Cost of Quality (COQ) report as a(n):
A) External failure cost.
B) Internal failure cost.
C) Training cost.
D) Opportunity cost.
E) Appraisal cost.

Accepted Answer

The cost of using a statistical quality control system is an example of an appraisal cost, which is a cost incurred to ensure that a product or service meets the quality standards set by the organization. This cost is incurred to measure, evaluate, or audit the product's conformance to quality standards. Therefore, the best choice is E.

Question 9

What is the reasoning behind the misconception that quality improvements decrease productivity?

Accepted Answer

The answer of What is the reasoning behind the misconception...

Question 10

In 2019 a manufacturing company instituted a Total Quality Management (TQM) program and one year later produced the report shown below:
Summary of Cost of Quality (COQ) Report
(in thousands)
$\begin{array}{lrrrc} 
& 2019 & 2020 & \% \text { Change } \
\text { Prevention costs } & \$ 200 & \$  300 & +50 \
\text { Appraisal costs } & 210  & 315 & +50 \
\text { Internal failure costs } & 190 & 114 & -40 \
\text { External failure costs } & 1.200  & 621 & -48\
\text { Total COQ }&\$1,800&\$1,350&-25
\end{array}$Based on the above report, which one of the following statements is most likely correct?
A) An increase in conformance costs resulted in a higher-quality product, and therefore, resulted in a decrease in non-conformance costs.
B) An increase in inspection costs was solely responsible for the decrease in total quality costs.
C) Quality costs such as scrap and rework decreased by 48 percent.
D) Quality costs such as returns and repairs under warranty decreased by 40 percent.
E) Non-conformance costs increased by 50 percent and conformance costs decreased by approximately 47 percent.

Accepted Answer

The report shows an increase in prevention and appraisal costs (conformance costs) and a decrease in internal and external failure costs (non-conformance costs), indicating that investing in quality improvement (higher conformance costs) led to a reduction in failures and defects (lower non-conformance costs).

Question 11

The four accepted categories of a Cost of Quality (COQ) Report are: prevention, appraisal, internal failure, and external failure. Assume your cost management instructor has given you an assignment related to COQ. You are to relate each of the cost categories above to the preparation of a class project, which is a study of an actual firm's cost management system. The typical student spends 16 hours researching an identified firm, five hours writing the report, and three hours in revising and presenting the report to the class.
Required:
1. Give an example of prevention, appraisal, internal failure, and external failure costs you might encounter in writing and presenting your report. (Example: "Draw up a time budget with necessary deadlines before starting the report" is an example of a prevention cost.)
2. Which of the four category examples you gave for Requirement (1) above has the greatest cost? What has the least cost? What has the greatest benefit? What has the least benefit? (Example: "Not saving word processing on a hard drive or jump drive" is an example of greatest cost in terms of time.)

Accepted Answer

The answer of The four accepted categories of a Cost...

Question 12

Identify the appropriate cost-of-quality (COQ) category for each of the following items: 
1. Engineering time spent to simplify production processes.
2. Engineering time spent on engineering change orders to reduce the number of component used in a current product.
3. Scrap resulting from substandard materials undetected by the receiving personnel.
4. Rework to correct inconsistency caused by machine variability.
5. Preventive maintenance on machinery.
6. Product inspections.
7. Air freight to replace a defective part discovered by a customer.
8. Long-distance call to a customer who has experienced a quality failure.

Accepted Answer

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Question 13

Wolk Corporation is a highly automated manufacturing firm. The vice president of finance has decided that traditional standards are inappropriate for performance measures in an automated environment. Labor for this company is insignificant in terms of the total cost of production and tends to be fixed, material quality is considered more important than minimizing material cost, and customer satisfaction is the number one priority. As a result, delivery performance measures have been chosen to evaluate performance. The following information is considered typical of the time involved to complete customer orders.$\begin{array}{lr}
\text { From time order is placed to time order received by manufacturing } & 10.0 \text { days } \
\text { From time order is received by manufacturing to time production begins } & 5.0 \text { days } \
\text { Inspection time } & 1.5 \text { days } \
\text { Process (manufacturing) time } & 3.0 \text { days } \
\text { Move time } & 2.5 \text { days }
\end{array}$What is the processing cycle efficiency (PCE) for this order (rounded to one decimal point, e.g., 34.721% = 34.7%)?
A) 25.0%.
B) 13.6%.
C) 37.5%.
D) 69.2%.
E) 33.3%.

Accepted Answer

The answer of Wolk Corporation is a highly automated manufacturing...

Question 14

Wolk Corporation is a highly automated manufacturing firm. The vice president of finance has decided that traditional standards are inappropriate for performance measures in an automated environment. Labor for this company is insignificant in terms of the total cost of production and tends to be fixed, material quality is considered more important than minimizing material cost, and customer satisfaction is the number one priority. As a result, delivery performance measures have been chosen to evaluate performance. The following information is considered typical of the time involved to complete customer orders.$\begin{array}{lr}
\text { From time order is placed to time order received by manufacturing } & 10.0 \text { days } \
\text { From time order is received by manufacturing to time production begins } & 5.0 \text { days } \
\text { Inspection time } & 1.5 \text { days } \
\text { Process (manufacturing) time } & 3.0 \text { days } \
\text { Move time } & 2.5 \text { days }
\end{array}$What is the production (manufacturing) lead time for this order?
A) 7 days.
B) 8 days.
C) 15 days.
D) 18 days.
E) 19 days.

Accepted Answer

The production (manufacturing) lead time is the sum of the time from when the order is received by manufacturing to when production begins, inspection time, process time, and move time: 5.0 + 1.5 + 3.0 + 2.5 = 12 days. However, the correct choice is not listed, indicating a potential error in the options provided.

Question 15

Jordan Company manufactures doors and maintains a Cost-of-Quality (COQ) reporting system. Classify each of the following quality-related costs as a prevention cost, an appraisal cost, an internal failure cost, an external failure cost, or none of the above.
(a) Retesting of reworked products 
(b) Downtime due to quality problems 
(c) Analysis of the cause of defects in production 
(d) Depreciation of test equipment 
(e) Warranty repairs 
(f) Lost sales arising from a reputation for poor quality 
(g) Quality circles 
(h) Rework direct manufacturing labor and overhead 
(i) Net cost of spoilage 
(j) Technical support provided to suppliers 
(k) Audits of the effectiveness of the quality system 
(l) Plant utilities in the inspection area

Accepted Answer

The answer of Jordan Company manufactures doors and maintains a...

Question 16

Product-quality-related costs are part of a total quality control program. A product-quality-related cost incurred in detecting individual products that do not conform to specifications is an example of a(n):
A) Prevention cost.
B) Appraisal cost.
C) Internal failure cost.
D) External failure cost.
E) Opportunity cost.

Accepted Answer

Appraisal costs are incurred to detect and prevent defects or non-conforming products. Examples of appraisal costs include inspection, testing, and quality control. In this scenario, the cost incurred to detect products that do not conform to specifications is an appraisal cost, as it is aimed at ensuring that only products meeting the required specifications are approved for sale or use.

Question 17

An example of an internal failure cost in a Cost-of-Quality (COQ) reporting system is:
A) Maintenance.
B) Inspection.
C) Rework.
D) Product recalls.
E) Contribution margin foregone in terms of lost sales.

Accepted Answer

Rework refers to the cost of correcting defects in a product or service that were not detected during production or prior to delivery to the customer. This is an internal failure cost, as it indicates a failure in the organization's quality control measures.

Question 18

Listed below are 6 items concerned with quality.
Required:
Classify each of these items into its appropriate Cost-of-Quality (COQ) category: Prevention Cost; Appraisal Cost; Internal Failure Cost; or External Failure Cost.
1. Establish a 24-hour hot line for customers to report quality failures.
2. Establish a quality-inspection program.
3. Re-design parts and components to simplify manufacturing of the product.
4. Hire additional field service people to provide better services.
5. Extend the warranty period for products from 90 days to one year.
6. Train employees on the importance of zero defects.

Accepted Answer

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Question 19

Cari and Jeremy just bought a bed and breakfast inn at a very attractive price. The business had been doing poorly. Before they reopened the inn for business, they attended a seminar on operating a high-quality business. Now that they are ready to open the inn, they need some advice on quality costs and the management and control of quality.
Required:
1. Identify and define each of the four categories in a typical Cost-of-Quality (COQ) reporting system.
2. For the identified business (bed and breakfast) provide three examples of costs within each of the four COQ categories.

Accepted Answer

The answer of Cari and Jeremy just bought a bed...

Question 20

Which of the following items is not considered an external quality (performance) metric?
A) On-time delivery rates.
B) Customer response time (CRT).
C) Number of customer complaints.
D) Throughput efficiency (i.e., the ratio of throughput to resources used).
E) Percentage of products that experience early or excessive failure.

Accepted Answer

Throughput efficiency is an internal quality metric, as it measures how efficiently resources are being used within the system. External quality metrics, on the other hand, focus on aspects of the system's performance that are visible or important to customers or stakeholders outside of the organization. A, B, C, and E are all examples of external quality metrics.

Quiz 17: The Management and Control of Quality

Chapter 17 presents (as Exhibit 17.3) a framework that can be used as the basis for creating a comprehensive system for managing and controlling quality. Required: Provide an overview of the key elements of the framework presented in the chapter.

List and explain three tools that can be used to identify or detect quality problems in a process or operation.

List three examples of quality improvement initiatives in a manufacturing facility that would lead to increased sales productivity. Answer: Three examples (among other possible answers) of quality improvement initiatives leading to increased productivity are:

ISO certification is a key component of a firm's efforts to improve quality and compete successfully. Required: What must an organization demonstrate, in terms of its operating processes, to become ISO-9000 certified?

The cost of scrap, rework, and tooling changes in a Cost of Quality (COQ) Report are properly categorized as a(n) :

Statistical quality control often involves the use of control charts, whose basic purpose is to:

The cost of using a statistical quality control system is properly characterized in a Cost of Quality (COQ) report as a(n) :

What is the reasoning behind the misconception that quality improvements decrease productivity?

Product-quality-related costs are part of a total quality control program. A product-quality-related cost incurred in detecting individual products that do not conform to specifications is an example of a(n) :

An example of an internal failure cost in a Cost-of-Quality (COQ) reporting system is:

Which of the following items is not considered an external quality (performance) metric?