SCM Chapter 6

Managers at Arnold Palmer Hospital take quality so seriously that the hospital typically is a national leader in several quality areas-so that continuous improvement is no longer necessary.

False

An improvement in quality must necessarily increase costs.

False

Which of the following statements regarding Arnold Palmer Hospital is FALSE?
A) The hospital uses a wide range of quality management techniques.
B) The culture of quality at the hospital includes employees at all levels.
C) The hospital scores very highly in national studies of patient satisfaction.
D) The hospital’s high quality is measured by low readmission rates, not patient satisfaction.
E) The design of patient rooms, even wall colors, reflects the hospital’s culture of quality.

D

Companies with the highest levels of quality are how many times more productive than their competitors with the lowest quality levels?
A) 2
B) 3
C) 4
D) 5
E) None of the above because quality has no impact on productivity (units/labor hr.).

D

A successful quality strategy features which of the following elements?
A) an organizational culture that fosters quality
B) an understanding of the principles of quality
C) engaging employees in the necessary activities to implement quality
D) A and C
E) A, B, and C

E

Quality can improve profitability by reducing costs. Which of the following is not an aspect of reduced costs by quality improvements?
A) flexible pricing
B) increased productivity
C) lower rework and scrap costs
D) lower warranty costs
E) All of the above are aspects of reduced costs by quality improvements.

A

The definition of quality adopted by The American Society for Quality is a customer-oriented (i.e., user based) definition.

True

Conforming to standards is the focus of the product-based definition of quality.

False

Internal failure costs are associated with scrap, rework, and downtime.

True

Philip Crosby is credited with both of these quality catch-phrases: "quality is free" and "zero defects."

True

Deming’s writings on quality tend to focus on the customer and on fitness for use, unlike Juran’s work that is oriented toward meeting specifications.

False

Improved quality can increase profitability via allowing flexible pricing.

True

"Quality lies in the eyes of the beholder" is:
A) an unrealistic definition of quality.
B) a user-based definition of quality.
C) a manufacturing-based definition of quality.
D) a product-based definition of quality.
E) the definition of quality proposed by the American Society for Quality.

B

"Making it right the first time" is:
A) an unrealistic definition of quality.
B) a user-based definition of quality.
C) a manufacturing-based definition of quality.
D) a product-based definition of quality.
E) the definition of quality proposed by the American Society for Quality

C

Three broad categories of definitions of quality are:
A) product quality, service quality, and organizational quality.
B) user based, manufacturing based, and product based.
C) internal, external, and prevention.
D) low-cost, response, and differentiation.
E) Pareto, Shewhart, and Deming.

B

According to the manufacturing-based definition of quality:
A) quality is the degree of excellence at an acceptable price and the control of variability at an acceptable cost.
B) quality depends on how well the product fits patterns of consumer preferences.
C) even though quality cannot be defined, you know what it is.
D) quality is the degree to which a specific product conforms to standards.
E) quality lies in the eyes of the beholder.

C

Which of the following is NOT one of the major categories of costs associated with quality?
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs
E) None of the above; they are all major categories of costs associated with quality.

E

All of the following costs are likely to decrease as a result of better quality EXCEPT:
A) customer dissatisfaction costs.
B) inspection costs.
C) scrap costs.
D) warranty and service costs.
E) maintenance costs.

E

Which of the four major categories of quality costs is particularly hard to quantify?
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs
E) None is hard to quantify.

D

GE’s recall of 3.1 million dishwashers cost the company more in repairs than the value of the actual dishwashers. This is an example of which quality principle?
A) PDCA
B) internal failure costs
C) appraisal costs
D) cost of poor quality is underestimated
E) prevention costs

D

Which of the following statements is NOT true?
A) Self-promotion is not a substitute for quality products.
B) Inferior products harm a firm’s profitability and a nation’s balance of payments.
C) Product liability transfers from the manufacturer to the retailer once the retailer accepts delivery of the product.
D) Quality-be it good or bad-will show up in perceptions about a firm’s new products, employment practices, and supplier relations.
E) Legislation such as the Consumer Product Safety Act sets and enforces product standards by banning products that do not reach those standards.

C

"The employee cannot produce products that on average exceed the quality of what the process is capable of producing" expresses a basic philosophy in the writings of:
A) Vilfredo Pareto.
B) Armand Feigenbaum.
C) Joseph M. Juran.
D) W. Edwards Deming.
E) Philip B. Crosby.

D

"Quality Is Free," meaning that the costs of poor quality have been understated, is the work of:
A) W. Edwards Deming.
B) Joseph M. Juran.
C) Philip B. Crosby.
D) Crosby, Stills, and Nash.
E) Armand Feigenbaum.

C

Stakeholders who are affected by the production and marketing of poor quality products include:
A) stockholders, employees, and customers.
B) suppliers and creditors, but not distributors.
C) only stockholders, creditors, and owners.
D) suppliers and distributors, but not customers.
E) only stockholders and organizational executives and managers.

A

Regarding the quality of design, production, and distribution of products, an ethical requirement for management is to:
A) determine whether any of the organization’s stakeholders are being wronged by poor quality products.
B) gain ISO 9000 certification for the organization.
C) obtain a product safety certificate from the Consumer Product Safety Commission.
D) have the organization’s legal staff write disclaimers in the product instruction booklets.
E) compare the cost of product liability to the external failure cost.

A

To become ISO 9000 certified, organizations must:
A) document quality procedures.
B) have an onsite assessment.
C) have an ongoing series of audits of their products or service.
D) all of the above
E) none of the above

D

Identify the four costs of quality. Which one is hardest to evaluate? Explain.

The four costs are internal failure, external failure, prevention, and appraisal. The hardest category to estimate is external failure costs, or costs that occur after delivery of defective parts or services. These costs are very hard to quantify.

The focus of ISO 9000 is to enhance success through what eight quality management principles?

(1) top management leadership, (2) customer satisfaction, (3) continual improvement, (4) involvement of people, (5) process analysis, (6) use of data-driven decision making, (7) a systems approach to management, and (8) mutually beneficial supplier relationships

Quality is mostly the business of the quality control staff, not ordinary employees.
Answer: FALSE

False

TQM is important because each of the ten decisions made by operations managers deals with some aspect of identifying and meeting customer expectations.

True

The phrase Six Sigma has two meanings. One is statistical, referring to an extremely high process, product, or service capability; the other is a comprehensive system for achieving and sustaining business success.

True

Continuous improvement is based on the philosophy that any aspect of an operation can be improved.

True

Kaizen is similar to TQM in that both are focused on continuous improvement.

True

Quality circles empower employees to improve productivity by finding solutions to work-related problems in their work area.

True

Benchmarking requires the comparison of your firm to other organizations; it is not appropriate to benchmark by comparing one of your divisions to another of your divisions.

False

Line employees need the knowledge of TQM tools.

True

One of the ways that just-in-time (or JIT) influences quality is that by reducing inventory, bad quality is exposed.

True

The quality loss function indicates that costs related to poor quality are low as long as the product is within acceptable specification limits.

False

The philosophy of zero defects is:
A) the result of Deming’s research.
B) unrealistic.
C) prohibitively costly.
D) an ultimate goal; in practice, 1 to 2% defects is acceptable.
E) consistent with the commitment to continuous improvement.

E

Based on his 14 Points, Deming is a strong proponent of:
A) inspection at the end of the production process.
B) an increase in numerical quotas to boost productivity.
C) looking for the cheapest supplier.
D) training and knowledge.
E) all of the above.

D

PDCA, developed by Shewhart, stands for which of the following?
A) Plan-Do-Check-Act
B) Plan-Develop-Check-Accept
C) Problem-Develop Solution-Check-Act
D) Problem-Do-Continue-Act
E) Prepare-Develop-Create-Assess

A

PDCA is most often applied with regard to which aspect of TQM?
A) Six Sigma
B) employee empowerment
C) continuous improvement
D) benchmarking
E) JIT

C

A Three Sigma program has how many defects per million?
A) 34
B) 3
C) 3 times the standard deviation
D) 2700
E) 1500

D

A hospital benchmarked against Ferrari Racing in an effort to:
A) improve patient handoff quality.
B) increase surgery prep time.
C) lengthen surgery duration.
D) reduce the number of doctors.
E) all of the above

A

One of Britain’s largest children’s hospitals working with Ferrari Racing is an example of:
A) internal benchmarking.
B) external benchmarking.
C) Taguchi concepts.
D) employee empowerment.
E) corporate responsibility.

B

) If 1 million passengers pass through the St. Louis Airport with checked baggage each month, a successful Six Sigma program for baggage handling would result in how many passengers with misplaced luggage?
A) 3.4
B) 6.0
C) 34
D) 2700
E) 6 times the monthly standard deviation of passengers

A

) Suppose that a firm has historically been achieving "Three Sigma" quality. If the firm later changes its quality management practices such that it begins to achieve "Six Sigma" quality, which of the following phenomena will result?
A) The average number of defects will be cut in half.
B) The specification limits will be moved twice as far from the mean.
C) The average number of defects will be cut by 99.9997%.
D) The average number of defects will be cut by 99.87%.
E) The average number of defects will be cut by 99.73%.

D

Total quality management emphasizes:
A) the responsibility of the quality control staff to identify and solve all quality-related problems.
B) a commitment to quality that goes beyond internal company issues to suppliers and customers.
C) a system where strong managers are the only decision makers.
D) a process where mostly statisticians get involved.
E) ISO 14000 certification.

B

A successful TQM program incorporates all EXCEPT which of the following?
A) continuous improvement
B) employee involvement
C) benchmarking
D) centralized decision-making authority
E) JIT

D

Kaizen is a Japanese term meaning:
A) a foolproof mechanism.
B) just-in-time (JIT).
C) a fishbone diagram.
D) setting standards.
E) continuous improvement.

E

Which of the following statements regarding "Six Sigma" is TRUE?
A) The term has two distinct meanings-one is statistical; the other is a comprehensive quality system.
B) Six Sigma means that about 94 percent of a firm’s output is free of defects.
C) The Six Sigma program was developed by Toyota in the 1970s.
D) The Six Sigma program is for manufacturing firms and is not applicable to services.
E) Six Sigma certification is granted by the International Standards Organization (ISO).

A

Members of quality circles are:
A) paid according to their contribution to quality.
B) external consultants designed to provide training in the use of quality tools.
C) always machine operators.
D) all trained to be facilitators.
E) None of the above; all of the statements are false.

E

Techniques for building employee empowerment include:
A) building communication networks that include employees.
B) developing open, supportive supervisors.
C) moving responsibility from both managers and staff to production employees.
D) building high-morale organizations.
E) All of the above are techniques for employee empowerment.

E

Building high-morale organizations and building communication networks that include employees are both elements of:
A) ISO 9000 certification.
B) Six Sigma certification.
C) employee empowerment.
D) Taguchi methods.
E) the tools of TQM.

C

The process of identifying other organizations that are best at some facet of your operations and then modeling your organization after them is known as:
A) continuous improvement.
B) employee empowerment.
C) benchmarking.
D) copycatting.
E) patent infringement.

C

Costs of dissatisfaction, repair costs, and warranty costs are elements of cost in the:
A) quality loss function.
B) Pareto chart.
C) ISO 9000 quality cost calculator.
D) process chart.
E) Ishikawa diagram.

A

A quality loss function includes all of the following costs EXCEPT:
A) the cost of scrap and repair.
B) the cost of customer dissatisfaction.
C) inspection, warranty, and service costs.
D) sales costs.
E) costs to society.

D

A manager tells her production employees, "It’s no longer good enough that your work falls anywhere within the specification limits. I need your work to be as close to the target value as possible." Her thinking is reflective of:
A) internal benchmarking.
B) Six Sigma.
C) ISO 9000.
D) Taguchi concepts.
E) process control charts.

D

Identify the five steps of DMAIC.

(1) Define the project’s purpose, scope, and outputs and then identify the required process information, keeping in mind the customer’s definition of quality; (2) Measure the process and collect data; (3) Analyze the data, ensuring repeatability (the results can be duplicated), and reproducibility (others get the same result); (4) Improve, by modifying or redesigning, existing processes and procedures; and (5) Control the new process to make sure performance levels are maintained.

What steps can be taken to develop benchmarks?

(1) determine what to benchmark, (2) form a benchmarking team, (3) identify benchmarking partners, (4) collect and analyze benchmarking information, and (5) take action to match or exceed the benchmark.

Explain how just-in-time processes relate to the quality of an organization’s outputs.

JIT reduces costs of quality by lowering waste and scrap. JIT improves quality by shortening the time between error detection and error correction. Meanwhile, better quality means less inventory and a better JIT system.

What is the difference between conformance-oriented quality and target-oriented quality?

With conformance-oriented quality, any unit that meets specifications is acceptable, whether it is on the edges or center of the specification range. Target-oriented quality treats output as better the closer it is to exactly what the customer wants.

Identify the seven major concepts of TQM.

The major concepts of total quality management are (1) continuous improvement, (2) Six Sigma, (3) employee empowerment, (4) benchmarking, (5) just-in-time (JIT), (6) Taguchi concepts, and (7) knowledge of TQM tools.

What is the quality loss function (QLF)?

The quality loss function identifies all costs connected with poor quality and shows how these costs increase as the product quality moves away from being exactly what the customer wants.

Pareto charts are a graphical way of identifying the few critical items from the many less important ones.

True

A cause-and-effect diagram helps identify the sources of a problem.

True

Pareto charts are used to:
A) identify inspection points in a process.
B) outline production schedules.
C) organize errors, problems, or defects.
D) show material flow.
E) show the range of values of a measurement and the frequency with which each value occurs.

C

The "four Ms" of cause-and-effect diagrams are:
A) material, machinery/equipment, manpower, and methods.
B) material, methods, men, and mental attitude.
C) named after four quality experts.
D) material, management, manpower, and motivation.
E) mentality, motivation, management, and manpower.

A

Among the tools of TQM, the tool ordinarily used to aid in understanding the sequence of events through which a product travels is a:
A) Pareto chart.
B) flowchart.
C) check sheet.
D) Taguchi map.
E) poka-yoke.

B

The process improvement technique that sorts the vital few from the trivial many is:
A) Taguchi analysis.
B) Pareto analysis.
C) benchmarking.
D) Deming analysis.
E) Yamaguchi analysis.

B

A production manager at a pottery factory has noticed that about 70 percent of defects result from impurities in raw materials, 15 percent result from human error, 10 percent from machine malfunctions, and 5 percent from a variety of other causes. This manager is most likely using:
A) a Pareto chart.
B) a scatter diagram.
C) a quality loss function.
D) a cause-and-effect diagram.
E) a flowchart.

A

A customer service manager at a retail clothing store has collected numerous customer complaints from the forms they fill out on merchandise returns. To analyze trends or patterns in these returns, she has organized these complaints into a small number of sources or factors. This is most closely related to the ________ tool of TQM.
A) quality loss function
B) cause-and-effect diagram
C) scatter diagram
D) histogram
E) process control chart

B

A fishbone chart is also known as a:
A) cause-and-effect diagram.
B) poka-yoke diagram.
C) Kaizen diagram.
D) Kanban diagram.
E) Taguchi diagram.

A

If a sample of parts is measured and the mean of the measurements is outside the control limits, the process is:
A) in control, but not capable of producing within the established control limits.
B) out of control and the process should be investigated for assignable variation.
C) within the established control limits with only natural causes of variation.
D) monitored closely to see if the next sample mean will also fall outside the control limits.
E) none of the above.

B

A quality circle holds a brainstorming session and attempts to identify the factors responsible for flaws in a product. Which tool do you suggest they use to organize their findings?
A) Ishikawa diagram
B) Pareto chart
C) flowchart
D) control charts
E) activity chart

A

When sample measurements falls inside the control limits, it means that:
A) each unit manufactured is good enough to sell.
B) the process limits cannot be determined statistically.
C) the process output exceeds the requirements.
D) if there is no other pattern in the samples, the process is in control.
E) the process output does not fulfill the requirements.

D

Which of the following is FALSE regarding control charts?
A) Values above the upper control limits imply that the product’s quality is exceeding expectations.
B) Control charts are built so that new data can be quickly compared to past performance data.
C) Control charts graphically present data.
D) Control charts plot data over time.
E) None of the above is false.

A

Explain how a Pareto chart can identify the most important causes of errors in a process.

There will generally be some causes with much higher frequencies than others. The frequency plot will clearly show which cause has the highest frequency.

The Japanese use the term poka-yoke to refer to continuous improvement.

False

Source inspection is inferior to inspection before costly operations.

False

A checklist is a type of poka-yoke to help ensure consistency and completeness in carrying out a task.

True

The goal of inspection is to:
A) detect a bad process immediately.
B) add value to a product or service.
C) correct deficiencies in products.
D) correct system deficiencies.
E) all of the above

A

Which of the following is not a typical inspection point?
A) upon receipt of goods from your supplier
B) when production or service is complete
C) before the product is shipped to the customer
D) at the supplier’s plant while the supplier is producing
E) after a costly process

E

A good description of source inspection is inspecting:
A) materials upon delivery by the supplier.
B) the goods at the production facility before they reach the customer.
C) the design specifications.
D) goods at the supplier’s plant.
E) one’s own work.

E

Poka-yoke is the Japanese term for:
A) card.
B) foolproof.
C) continuous improvement.
D) fishbone diagram.
E) just-in-time production.

B

In his book, Safe Patients, Smart Hospitals, Dr. Peter Pronovost emphasizes the use of what tool to reduce catheter infections?
A) a Pareto chart
B) a flowchart
C) a cause-and-effect diagram
D) a checklist
E) a statistical process control chart

D

A checklist is a type of:
A) poka-yoke.
B) kaizen.
C) kanban.
D) Pareto chart
E) flowchart

A

How is source inspection related to employee empowerment?

Source inspection involves the operator ensuring that the job is done properly. These operators are empowered to self-check their own work. Employees that deal with a system on a daily basis have a better understanding of the system than anyone else, and they can be very effective at improving the system.

What is a poka-yoke? Give an example.

Literally translated "foolproof," a poka-yoke is a foolproof device or technique that ensures production of good units every time. Examples will vary, but include McDonald’s french fry scoop and standard sized bags used to ensure the correct quantity, and prepackaged surgical coverings that contain exactly the items needed for a medical procedure.

Security is the determinant of service quality that means freedom from danger, risk, or doubt.

True

Of the several determinants of service quality, access is the one that relates to keeping customers informed in language they can understand.

False

What refers to training and empowering frontline workers to solve a problem immediately?
A) just-in-time
B) poka-yoke
C) benchmarking
D) kaizen
E) service recovery

E

A recent consumer survey conducted for a car dealership indicates that, when buying a car, customers are primarily concerned with the salesperson’s ability to explain the car’s features, the salesperson’s friendliness, and the dealer’s honesty. The dealership should be ESPECIALLY concerned with which determinants of service quality?
A) communication, courtesy, and credibility
B) competence, courtesy, and security
C) competence, responsiveness, and reliability
D) communication, responsiveness, and reliability
E) understanding/knowing customer, responsiveness, and reliability

A

Marketing issues such as advertising, image, and promotion are important to quality because:
A) they define for consumers the tangible elements of a service.
B) the intangible attributes of a product (including any accompanying service) may not be defined by the consumer.
C) they educate consumers on how to use the product.
D) they make the product seem more valuable than it really is.
E) they raise expenses and therefore decrease profitability.

B

Which of the determinants of service quality involves having the customer’s best interests at heart?
A) access
B) courtesy
C) credibility
D) responsiveness
E) tangibles

C

Which of the determinants of service quality involves performing the service right the first time?
A) access
B) courtesy
C) credibility
D) reliability
E) responsiveness

D

Identify the ten determinants of service quality. Describe two of them in a sentence or two each.

The ten are reliability, responsiveness, competence, access, courtesy, communication, credibility, security, understanding/knowing the customer, and tangibles. Descriptions are found in Table 6.5. Here are two examples: Access involves approachability and ease of contact. Security is the freedom from danger, risk, or doubt.