Operations Management: Processes and Supply Chains, 12e (Krajewski)

Chapter 3 Quality and Performance

3.1 Costs of Quality

1) The investment a company makes in training employees to perform their duties and redesigning
products and processes to improve them would be categorized as prevention costs.
Answer: TRUE
Difficulty: Moderate
Keywords: prevention cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

2) Appraisal costs ( Prevention) are associated with preventing defects before they happen.
Answer: FALSE
Difficulty: Moderate
Keywords: appraisal cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

3) An example of an internal failure cost (External Failure costs) would be warranty cost.
Answer: FALSE
Difficulty: Moderate
Keywords: internal failure cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

4) From an ethical standpoint, it is not a requirement to consider the greater societal effects of
decisions that reduce the costs of quality.
Answer: FALSE
Difficulty: Easy
Keywords: quality, ethics
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Ethical Understanding and Reasoning
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.
5) Since an employee's responsibility is to move production along, it is ethical to knowingly pass
defective services or products to internal or external customers when capacity is tight.
Answer: FALSE
Difficulty: Easy
Keywords: quality, ethics
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Ethical Understanding and Reasoning
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

6) When a process fails to satisfy a customer:

A) it is quite often the customer's fault.
B) it is considered a defect.
C) it is time to reengineer the process.
D) it is usually half the customer's fault and half the company's fault.
Answer: B
Difficulty: Easy
Keywords: process defect
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

7) Which of the following would be considered a prevention cost of quality?

A) inspecting incoming raw materials
B) training workers to perform their jobs
C) issuing a recall of defective product before another customer is injured
D) performing a 24 hour burn-in on every item produced to make sure it works before it is shipped
Answer: B
Difficulty: Easy
Keywords: prevention cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

8) Which of the following would be considered an appraisal cost of quality?

A) training workers to perform their jobs
B) purchasing better tools for workers to perform their jobs
C) repairing an item under the warranty
D) running a functional test on each item before it is boxed for shipment
Answer: D
Difficulty: Moderate
Keywords: appraisal cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.
9) A prime example of an internal failure cost is the:
A) labor cost associated with inspecting every item produced.
B) labor cost associated with repairing an item returned under warranty.
C) material cost of a piece of stock metal that has had too large a hole drilled in it.
D) material cost of the paint applied to the case of a finished unit.
Answer: C
Difficulty: Moderate
Keywords: internal failure cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

10) A professor, dissatisfied with a product he's purchased, bad mouths the product to his class,
resulting in decreased market share (since the students believe everything he tells them). The
manufacturer suffers:
A) an internal failure cost.
B) an external failure cost.
C) a prevention cost.
D) an appraisal cost.
Answer: B
Difficulty: Easy
Keywords: internal failure cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.

11) Improving quality seems to be a strategic weapon in gaining market share. However, improving
quality entails allocation of resources and effort. As greater effort is expended to stop defects before
they occur, which one of the following costs increases?
A) prevention costs
B) appraisal costs
C) internal failure costs
D) external failure costs
Answer: A
Difficulty: Easy
Keywords: prevention cost
Learning Outcome: Discuss the total cost of quality and compare the common methods of managing quality
AACSB: Application of Knowledge
Learning Obj.: Define the four major costs of quality, and their relationship to the role of ethics in determining
the overall costs of delivering products and services.