Question 1

A corporation can measure its quality performance by using financial or nonfinancial measures of quality. Discuss the merits of each method and whether the use of one precludes the use of the other.

Accepted Answer

The answer of A corporation can measure its quality performance...

Question 2

Cari and Jereme 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 management.
Required:
Identify four categories of quality costs. In addition, identify three items that would be classified in each of the categories.

Accepted Answer

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

Question 3

The Door Company manufactures doors. Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs.
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 labour 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
m. Reentering data because of keypunch errors

Accepted Answer

The answer of The Door Company manufactures doors. Classify each...

Question 4

To complete the first setup on a new machine took an employee 200 minutes. Using an 80% cumulative average-time learning curve indicates that the second setup on the new machine is expected to take
A) 160 minutes.
B) 120 minutes.
C) 80 minutes.
D) 60 minutes.
E) 128 minutes.

Accepted Answer

The formula for cumulative average-time learning curve is:
Y = kx^n
Where:
Y is the time required to complete the task on the xth unit
k is the time required for the first unit
n is the learning curve coefficient

We know that:
k = 200 minutes (time required for the first setup)
n = ln(0.8)/ln(2) = -0.3219 (since the learning rate is 80%, the time should decrease as the number of units increase, hence the negative coefficient)

To find the time required for the second setup, we need to plug in the values:
Y = kx^n
Y = 200 x 2^(-0.3219)
Y = 200 x 0.7755
Y = 155.10 minutes

Therefore, the second setup on the new machine is expected to take 155.10 minutes, which is closest to B) 120 minutes.

Question 5

To complete the first setup on a new machine took an employee 200 minutes. Using an 80% incremental unit-time learning curve indicates that the second setup on the new machine is expected to take
A) 160 minutes.
B) 120 minutes.
C) 80 minutes.
D) 60 minutes.
E) 128 minutes.

Accepted Answer

The answer of To complete the first setup on a...

Question 6

Define cost of quality (COQ), list the four categories, and provide an example of each.

Accepted Answer

The answer of Define cost of quality (COQ), list the...

Question 7

When an average unit of time declines by a constant percentage each time that the cumulative quantity of units produced is doubled, it is known as
A) cumulative average time.
B) incremental unit time.
C) last unit time.
D) relative unit time.
E) cumulative unit time.

Accepted Answer

The answer of When an average unit of time declines...

Question 8

The two basic aspects of quality are quality of design and conformance quality. Define and give an
example of each.

Accepted Answer

The answer of The two basic aspects of quality are...

Question 9

Compare financial and nonfinancial performance, and explain why planning and control systems should consider both.

Accepted Answer

The answer of Compare financial and nonfinancial performance, and explain...

Question 10

Nidek manufactures sportswear. Classify each of the following quality costs as prevention, appraisal, internal failure or external failure.
a. Disposal of spoiled work in process
b. Downtime due to quality problems
c. Expediting work to meet delivery schedule
d. Field testing
e. Maintaining a complaint department
f. Product liability
g. Quality training
h. Reinspection
i. Rework direct manufacturing labour and overhead
j. Scrap
k. Testing and inspecting of machinery
l. Testing and inspecting of direct materials
m. Utilities in inspection area of plant
n. Warranty repairs

Accepted Answer

The answer of Nidek manufactures sportswear. Classify each of the...

Question 11

Andrew Pallet Co., Inc. manufactures pallets for various manufacturing companies. Each new employee takes 10 hours to make the first pallet and 8 hours to make the second. The manufacturing overhead charge per hour is $80.
Required:
a. What is the learning curve percentage assuming the cumulative average method?
b. What is the time needed to build 8 pallets by a new employee using the cumulative average-time method? Assume the rate of learning factor is -0.1520.
c. What is the time needed to produce the 16th pallet by a new employee using the incremental unit-time method? Assume the rate of learning factor is -0.3219.

Accepted Answer

The answer of Andrew Pallet Co., Inc. manufactures pallets for...

Question 12

Vestor Ltd. has estimated a 90% incremental unit time learning curve applies to labour time to manufacture its new product. The first unit took 18 hours. If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?
A) 14.58 hours
B) 64.80 hours
C) 72.00 hours
D) 64.01 hours
E) 58.32 hours

Accepted Answer

The answer of Vestor Ltd. has estimated a 90% incremental...

Question 13

Carl Clarkson and Lenny Lenid have been assigned to review the costs of quality at the Sprotton Chemicals Ltd. for the month of September. All amounts are in thousands (000's).
  Some information from a competitor, Sheltonville Industries, has been leaked. You learn that Sheltonville's costs of quality (as a percentage of total costs of quality) is 15% on external failure, 20% on internal failure, 35% on appraisal and the rest on prevention.
Required:
a. Prepare a cost of quality report for September for the Sprotton Chemicals including calculations of each cost category as a percentage of total costs of quality.
b. Compare Sprotton's approach to quality management to Sheltonville's. Comment on your findings. (What are the implications of the differences?)

Accepted Answer

The answer of Carl Clarkson and Lenny Lenid have been...

Question 14

Each time Maiertree Care hires a new employee it must wait for some period of time before the employee can meet production standards. Management is unsure of the learning curve in its operations but it knows the first job by a new employee averages 60 hours and the second job averages 48 hours. Assume all jobs to be equal in size.
Required:
a. What is the learning curve percentage, assuming the cumulative average-time method?
b. What is the time for a new employee to build 16 units with this learning curve using the cumulative average-time method? Assume the rate of learning factor is -0.1520.

Accepted Answer

The answer of Each time Maiertree Care hires a new...

Question 15

Harry's Picture manufactures various picture frames. Each new employee takes 5 hours to make the first picture frame and 4 hours to make the second. The manufacturing overhead charge per hour is $20.
Required:
a. What is the learning-curve percentage, assuming the cumulative average method?
b. What is the time needed to build 8 picture frames by a new employee using the cumulative average-time method? Assume the rate of learning factor is -0.1520.
c. What is the time needed to produce the 16th frame by a new employee using the incremental unit-time method? Assume the rate of learning factor is -0.3219.

Accepted Answer

The answer of Harry's Picture manufactures various picture frames. Each...

Question 16

Joe's Copy Centre hires a new employee. Joe knows he has to be patient with the employee until the employee gains enough experience to meet production standards. Joe is unsure of the learning curve in his operation, but he knows the first job by a new employee averages 40 minutes and the second job averages 32 minutes. Assume all jobs to be equal in size.
Required:
a. What is the learning-curve percentage, assuming the cumulative average-time method?
b. What is the time for a new employee to do 32 jobs with this learning curve using the cumulative average-time method? You may use an index of -0.1520.

Accepted Answer

The answer of Joe's Copy Centre hires a new employee....

Question 17

An experience curve
A) is a narrower application of the learning curve.
B) measures the decline in cost per unit as production decreases for various value-chain functions such as marketing as production increases.
C) only measures the decline in labour-hours per unit as units produced increases.
D) measures the increase in cost per unit as productivity increases.
E) measures the increase in labour-hours per unit as units produced increases.

Accepted Answer

An experience curve measures the decline in cost per unit as production increases for various value-chain functions such as marketing, production, and operations. It is a broader application of the learning curve. Option A, C, D, and E do not accurately describe an experience curve.

Question 18

Discuss how a manufacturer of personal computers such as Dell Computer can benefit from the introduction of a quality improvement program.

Accepted Answer

The answer of Discuss how a manufacturer of personal computers...

Question 19

Vestor Ltd. has estimated a 90% cumulative average-time learning curve applies to labour time to manufacture its new product. The first unit took 18 hours. If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?
A) 14.58 hours
B) 64.80 hours
C) 72.00 hours
D) 64.01 hours
E) 58.32 hours

Accepted Answer

The answer of Vestor Ltd. has estimated a 90% cumulative...

Question 20

A learning curve is a function
A) that measures the decline in labour-hours per unit due to workers becoming better at a job.
B) that increases at a greater rate as workers become more familiar with their tasks.
C) where unit costs increase as productivity increases.
D) that is linear.
E) that measures productivity improvements from new technology.

Accepted Answer

A learning curve is a function that measures the decline in labour-hours per unit due to workers becoming better at a job. As workers become more experienced and skilled at a task, they can complete it more efficiently, which results in lower labour-hours per unit. This is the essence of the learning curve.

Quiz 19: Cost Management: Quality, Time, and the Theory of Constraints

A corporation can measure its quality performance by using financial or nonfinancial measures of quality. Discuss the merits of each method and whether the use of one precludes the use of the other.

To complete the first setup on a new machine took an employee 200 minutes. Using an 80% cumulative average-time learning curve indicates that the second setup on the new machine is expected to take

To complete the first setup on a new machine took an employee 200 minutes. Using an 80% incremental unit-time learning curve indicates that the second setup on the new machine is expected to take

Define cost of quality (COQ), list the four categories, and provide an example of each.

When an average unit of time declines by a constant percentage each time that the cumulative quantity of units produced is doubled, it is known as

The two basic aspects of quality are quality of design and conformance quality. Define and give an example of each.

Compare financial and nonfinancial performance, and explain why planning and control systems should consider both.

Vestor Ltd. has estimated a 90% incremental unit time learning curve applies to labour time to manufacture its new product. The first unit took 18 hours. If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?

An experience curve

Discuss how a manufacturer of personal computers such as Dell Computer can benefit from the introduction of a quality improvement program.

Vestor Ltd. has estimated a 90% cumulative average-time learning curve applies to labour time to manufacture its new product. The first unit took 18 hours. If Vestor's estimates are correct, how many hours will be used to manufacture 4 total units?

A learning curve is a function