Deck 8: Performance Measurement And Information Management

Question 1

In the classification of defects,a "critical defect" is one that will result in a customer complaint.

Answer 1

False

Question 2

The cost of quality is a key financial performance indicator.

Answer 2

True

Question 3

Data mining is a type of interlinking.

Answer 3

True

Question 4

A convenient way of reporting quality costs is through a breakdown by organizational function.

Question 5

In traditional accounting systems,all quality costs except inspection and testing are charged to overhead.

Question 6

The number of nonconformities per unit is a commonly used indicator of manufacturing quality.

Question 7

The use of statistical techniques,such as regression and analysis of variance,will ensure an organization's ability to effectively analyze data.

Question 8

A dashboard provides a quick summary of a single process performance measure.

Question 9

Leading organizations in information management rigorously justify the return on investment of each expenditure in information technology.

Question 10

ERP systems,due to their emphasis on data security,are designed to restrict the flow of data through an organization.

Question 11

A "leading measure" predicts what will happen.

Question 12

Information is derived from the analysis of data.

Question 13

Activity-based costing organizes cost information around profit centers.

Question 14

Key business drivers represent things that separate an organization from its competition and define strengths to exploit or weaknesses to correct.

Question 15

Production volume and seasonal influences affect quality costs.

Question 16

A hotel's use of ratings and awards from travel industry publications to assess its competitive status is an example of using comparative data.

Question 17

Performance measures and indicators should reflect the most important factors that predict customer satisfaction and business performance.

Question 18

Information systems costs expended to develop data requirements and measurements represent appraisal costs.

Question 19

Quality costs in services are generally labor dependent.

Question 20

At the process level,quality and operational performance data form the basis for strategic planning and decision-making.

Question 21

A good balanced scorecard should contain:

A)lagging measure only.
B)leading measures only.
C)both lagging and leading measures.
D)neither lagging nor leading measures.

Question 22

If a company finds that the level of employee satisfaction appears to predict turnover,then employee satisfaction represents ______ measure while turnover represents ______ measure.

A)a leading, a lagging
B)a prescriptive, a predictive
C)a dependent, an independent
D)a prevention, an appraisal

Question 23

_____ is/are simply representation(s)of facts that come from some type of measurement process.

A)Data
B)Measures
C)Indicators
D)Information

Question 24

_____ is a useful financial performance indicator,which managers use to prioritize improvement projects and gauge the effectiveness of total quality efforts.

A)Benchmarking
B)Direct costing
C)Cost of quality
D)Qualitative Investment Analysis

Question 25

Which of the following is NOT a customer-focused outcome?

A)Response delays
B)Warranty claims
C)Customer retention
D)Positive referral

Question 26

Companies that recognize the importance of reliable and appropriate data and information practice all of the following activities EXCEPT:

A)development of a comprehensive set of performance indicators.
B)continuous refining of information sources and their uses.
C)ensuring that hardware and software systems are user-friendly.
D)collecting and analyzing data by quality control departments perform the collection and analysis of data.

Question 27

A set of financial,market,operational,and employee performance measures for management review and use is an example of:

A)an enterprise resource plan.
B)an interlinking model.
C)a data mine.
D)a balanced scorecard.

Question 28

Traditionally,most organizations relied on the following performance data EXCEPT:

A)customer perspective.
B)return on investment.
C)earnings per share.
D)machine utilization.

Question 29

Which of the following is NOT a benefit derived from good data and information management?

A)Workers obtain concrete feedback on their performance.
B)Operational cost are lowered due to better planning and improvement actions.
C)Large quantities of data-laden reports are generated.
D)Indicators provide effective measurement of customer service levels.

Question 30

_____ is a measurement that is not a direct or exclusive measure of performance.

A)Information
B)An indicator
C)A scorecard
D)A dashboard

Question 31

Robert Kaplan and David Norton developed a balanced scorecard which had four perspectives.Which one of the following is NOT one of them?

A)Financial
B)Industry
C)Customer
D)Innovation and Learning

Question 32

At the _____ level,operational performance data such as yields,cycle times,and productivity measures help middle managers determine accomplishment of their objectives,whether they are using resources effectively,and where improvement might be necessary.

A)individual
B)process
C)organization
D)industry

Question 33

Marketplace performance indicators could include all of the following EXCEPT:

A)measures of business growth.
B)new product and geographic markets entered.
C)percentage of new product sales as appropriate.
D)customer surveys on product and service performance.

Question 34

Data and information support management at different levels.Which of the following is NOT an example of data at the individual level that helps provide real-time information for feedback and process control?

A)Quality performance
B)Adherence to schedules
C)Costs of operations
D)Productivity measures

Question 35

Response time is an example of a:

A)service outcome.
B)workforce-focused outcome.
C)customer-focused outcome.
D)financial and market outcome.

Question 36

_____ measures are generally tracked by senior leadership to gauge overall organizational performance.

A)Financial
B)Customer
C)Product
D)Service

Question 37

The Malcolm Baldrige Criteria for Performance Excellence Results category groups performance measures into six sets.Which of the following is NOT one of them?

A)Product outcomes
B)Customer-focused outcomes
C)Industry-focused outcomes
D)Process effectiveness outcomes

Question 38

Perceived value is an example of a:

A)customer-focused outcome.
B)service outcome.
C)financial and market outcome.
D)process-effectiveness outcome.

Question 39

Absenteeism,turnover,training effectiveness,and engagement are examples of _____ outcomes.

A)process-effectiveness
B)customer-focused
C)workforce-focused
D)leadership

Question 40

_____ outcomes include business-specific indicators,such as innovation rates and increased use of product and process yields,and Six Sigma initiative results.

A)Process-effectiveness
B)Leadership
C)Customer-focused
D)Marketplace performance

Question 41

A _____ is any mistake or error that is passed on to the customer.

A)dysfunction
B)nonconformance
C)return
D)defect

Question 42

A(n)_____ defect is one likely to result in failure or to materially reduce the usability of the unit for its intended purpose.

A)internal
B)critical
C)minor
D)major

Question 43

_____ systems are software packages that integrate organizational information systems and provide an infrastructure for managing information across the enterprise.

A)Customer relationship management
B)Enterprise resource planning
C)Application service provider
D)Client-Server

Question 44

To reduce the inconsistency in calculating quality issues in products and processes,Six Sigma uses the measure of:

A)defects per million units (dpmu).
B)errors per million opportunities (epmo).
C)defects per million opportunities (dpmo).
D)errors per six million opportunities (epsmu)

Question 45

Regulatory or legal compliance is an example of a:

A)financial outcome.
B)leadership outcome.
C)workforce-focused outcome.
D)process effectiveness outcome.

Question 46

A unit of work is the:

A)measure of work in a manufacturing facility.
B)basis of calculating wages in production units.
C)output of a process or an individual process step.
D)the smallest task beyond which work cannot be simplified.

Question 47

The acronym SMART used to characterize good measures and indicators is expanded as:

A)short, modified, accurate, reachable, and testable.
B)simple, measurable, actionable, related, and timely.
C)superior, median, achievable, rational, and typical.
D)smart, movable, applicable, reasonable, and temporal.

Question 48

Which of the following is NOT a supply chain indicator?

A)Reductions in inventory and incoming inspections
B)Increases in quality and productivity
C)Product and process yields
D)Third-party assessment results

Question 49

Which of the following is NOT TRUE regarding effective performance measures?

A)They should be driven by internal and external factors that shape an organization's operating environment.
B)They should logically be tied to key business drivers.
C)They should be aligned with strategies and action plans.
D)They should follow the guidelines in the Baldrige Criteria.

Question 50

In services,a measure of quality analogous to defects per unit is:

A)errors per unit.
B)errors per opportunity.
C)defects per transaction.
D)defects per opportunity.

Question 51

Practical guidelines for designing a performance measurement system include all of the following EXCEPT that:

A)multiple indexes can be combined into one index.
B)measures should start at the top and flow down to all organizational levels.
C)measuring more variables is better than fewer variables.
D)measures should include a mix of the past, present, and future.

Question 52

A common process-level measurement,extensively used in Six Sigma environments,is _____ - the probability that a unit can pass through a series of process steps without defects.

A)zero defects
B)zero deviance
C)rolled throughput yield
D)normalized yield

Question 53

Generally,many organizations classify defects into _____ defects,_____ defects,and _____ defects.

A)critical; major; minor
B)internal; external; customer-based
C)product; process; delivery
D)design; delivery; customer service

Question 54

_____ uses analytical approaches and technologies such as cluster analysis,neural networks,and fuzzy logic.

A)Interlinking
B)Cost-benefit analysis
C)Data mining
D)Enterprise resource planning

Question 55

Operational improvement is an example of a:

A)customer-focused outcome.
B)process effectiveness outcome.
C)leadership outcome.
D)financial and market outcome.

Question 56

According to Six Sigma standards,a defect rate of 2 per 1,000 is equivalent to:

A)20000 dpmo.
B)2000 errors.
C)12,000 dpmo.
D)2,000 dpmo.

Question 57

Which of the following questions is NOT asked in the "Evaluate the performance measures to ensure their usefulness" stage to generate useful process performance measures?

A)Are measurements taken at critical points where value-adding activities occur?
B)Is it feasible to obtain the data needed for each measure?
C)Have operational definitions for each measurement been established?
D)What deviations can occur?

Question 58

Which of the following is NOT an internal responsiveness indicator to measure process effectiveness outcome?

A)Cycle times
B)Production flexibility
C)By-product use
D)Time to market

Question 59

Analysts examined the relationship between satisfaction levels and repeat sales at McGregor Buy & Save.They found that 88 percent of repeat purchases came from satisfied or very satisfied customers.They found that a one percentage point in overall satisfaction could bring in 6 million in repeat sales annually.This analysis is an example of:

A)defect ratio.
B)zero budgeting.
C)cost-benefit analysis.
D)interlinking.

Question 60

Because of the negative connotation of "defect" and its potential implication in liability suits,the term _____ has become widely accepted.

A)nonconformity
B)problem
C)error
D)complication

Question 61

A credit card company has identified speed of service as a strength that separates it from its competitors.For this company,speed of service can be viewed as:

A)comparative data.
B)a key business factor.
C)a lagging indicator.
D)an internal benchmark.

Question 62

Which of the following is NOT an external failure cost?

A)Scrap and rework costs
B)Costs due to customer complaints
C)Product recall costs
D)Product liability costs

Question 63

Better prevention of poor quality:

A)reduces internal and external failure costs, and increases appraisal cost.
B)reduces internal and external failure costs, and does not affect appraisal cost.
C)reduces external failure cost, does not affect internal failure cost, and increases appraisal cost.
D)reduces internal and external failure costs and appraisal cost.

Question 64

A collection of indicators summarizing organizational performance is known as a:

A)dashboard.
B)variance report.
C)status update.
D)hoshin call.

Question 65

The cost associated with unplanned machine downtime,when operators halt the production line after identifying an unacceptably high rate of defective output,should be classified as:

A)a prevention cost.
B)an internal quality cost.
C)an internal failure cost.
D)a reactive failure cost.

Question 66

The term 'dpmo' stands for:

A)defective parts manufactured on-site.
B)data processing for manufacturing operations.
C)defects per million opportunities.
D)design, production, and marketing organization.

Question 67

An advantage of cost of quality measures is that management receives a report where the unit of analysis is:

A)errors.
B)defects.
C)dollars.
D)lost sales.

Question 68

Which of the following is NOT a prevention cost?

A)Process control costs
B)Inspection costs
C)Quality planning costs
D)Training costs

Question 69

A measure is ______ if it provides the basis for decisions at the level at which it is applied.

A)understandable
B)actionable
C)observable
D)analyzable

Question 70

The cost of purchasing copies of a textbook on quality for employees as part of their training program in process improvement methods is considered:

A)a prevention cost.
B)an appraisal cost.
C)an internal quality cost.
D)an external quality cost.

Question 71

Quality costs are classified into all of the following major categories EXCEPT:

A)internal failure.
B)appraisal.
C)inspection.
D)prevention.

Question 72

Which of the following statements about traditional accounting systems is INCORRECT?

A)They present an inadequate picture of manufacturing efficiency.
B)They attach no value to rework or bottlenecks that impede processing.
C)They allocate overhead costs to the products and services that use them.
D)They usually are not structured to capture important cost-of-quality data.

Question 73

The notion that each customer contact provides the potential for the occurrence of problems can be operationalized by a measure of:

A)key success factors.
B)nonconformities per unit.
C)activity-based costing.
D)errors per opportunity.

Question 74

Which of the following is associated with defective products that have been delivered to the customer?

A)Internal failure costs
B)Appraisal costs
C)Downgrading costs
D)External failure costs

Question 75

For most companies embarking on a quality cost program,management typically finds that actual costs,in order of highest to lowest,are:

A)external failure, internal failure, appraisal, and prevention.
B)internal failure, external failure, prevention, and appraisal.
C)internal failure, prevention, external failure, and appraisal.
D)External failure, prevention, internal failure, and appraisal.

Question 76

The cost Ford Motor Corporation incurred to recall its one-year-old Windstar vans in order to replace a faulty relay switch is an example of:

A)a prevention cost.
B)an appraisal cost.
C)an internal failure cost.
D)an external failure cost.

Question 77

A judge rules that a lawn mower manufacturer must pay a liability settlement to a consumer who was injured using a defectively produced lawn mover.The cost of the settlement represents what type of cost to the manufacturer?

A)Prevention
B)Internal failure
C)Appraisal
D)External failure

Question 78

An inspector at a shirt manufacturer discovered that over fifteen hundred shirts were manufactured with incorrect buttons.The manufacturer sold the shirts at 70% of the normal price to a retailer who specializes in "factory seconds." The revenue lost by the manufacturer is considered:

A)a prevention cost.
B)an appraisal cost.
C)an internal failure cost.
D)an external failure cost.

Question 79

Inspection is:

A)an appraisal cost.
B)a prevention cost.
C)an internal failure cost.
D)an external failure cost.

Question 80

A machined part is returned to the drilling department for rework.The additional labor that is used to correct the quality problem with the part is:

A)a prevention cost.
B)an appraisal cost.
C)an internal failure cost.
D)an external failure cost.