In Year 2, a manufacturing company instituted a total quality management TQM) program producing the following report:On the basis of this report, which one of the fallowing statements is most likely true?
Answer(s): A
TQM emphasizes the supplier's relationship with the customer and recognizes that everyone in a process is at some time a customer or supplier of someone else, either within or outside the organization. The costs of quality include costs of conformance and costs of nonconformance. Casts of conformance include prevention costs and appraisal inspection) costs. Nonconformance costs are composed of internal failure costs and external failure costs, such as lost opportunity. Conformance costs prevention and appraisal) increased substantially, whereas the nonconformance casts internal and external failure) decreased. Hence, the increase in conformance casts resulted in a higher-quality product.
Quality cost indices are often used to measure and analyze the cost of maintaining a given level of quality. One example of a quality cost index, which uses a direct labor base, is computed asBased upon these costs data, the quality cost index
The index for May was [ US $4, 000 + $6, 000 + $12, 000 + $14, 000) $90, 000], and the index for June was 6% [ US $5, 000 + $5, 000 + $15, 000 + $-11, 000) $100, 000].
Which of the following statements regarding benchmarking is false?
Answer(s): D
Benchmarking is an ongoing process that entails quantitative and qualitative measurement of the difference between the company's performance of an activity and the performance by a best-in-class organization. The benchmarking organization against which a firm is comparing itself need not be a direct competitor. The important consideration is that the benchmarking organization be an outstanding performer in its industry.
An example of an internal nonfinancial benchmark is
Benchmarking is a continuous evaluation of the practices of the best organizations in their class and the adaptation of processes to reflect the best of these practices. It requires analysis and measurement of key outputs against those of the best organizations. This procedure also involves identifying the underlying key actions and causes that contribute to the performance difference. The percentage of orders delivered on time at the company's most efficient plant is an example of an internal nonfinancial benchmark.
Managerial performance may be measured in many ways. For example, an internal nonfinancial measure is
Feedback regarding managerial performance may take the form of financial and nonfinancial measures that may be internally or externally generated. Moreover, different measures have a long-term or short-term emphasis. Examples of internal nonfinancial measures are product quality, new product development time, and manufacturing lead time cycle time).
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