Deck 14: Consumer Stakeholders: Product and Service Issues.

Question 1

Court cases and legal doctrine now make it clear that business is responsible for product safety.

Answer 1

True

Question 2

By definition, quality does not include service.

Answer 2

False

Question 3

The challenge that management faces is to make products as safe as possible and affordable to consumers.

Answer 3

True

Question 4

Market share liability is rarely used today due to the absence of punitive damages.

Question 5

Quality and safety of products are central to consumers' concerns.

Question 6

The standard of absolute liability is less demanding than that of strict liability.

Question 7

The "subjective calculation" for value is a comparison of quality received for the price spent.

Question 8

The Food and Drug Administration grew out of the work of one man.

Question 9

The debate over product liability law continues.

Question 10

U.S. residents, more than people in other countries, tend to sue when they are harmed.

Question 11

Under the doctrine of strict liability, there is no legal defense for placing on the market a product that is dangerous to a consumer because of a known or knowable defect unless an argument of due diligence is allowed.

Question 12

Traditionally, the Food and Drug Administration's primary concern has been the "War on Drugs."

Question 13

The Food and Drug Administration and the CPSC have been controversial over the decades.

Question 14

The Consumer Product Safety Commission's power and budgets have been subject to the administration in office.

Question 15

The Consumer Product Safety Commission plays an important role for consumers regarding unsafe products

Question 16

A basic premise of Total Quality Management (TQM) is that the product designer is the final judge of quality.

Question 17

Business's response to consumerism has consistently been to meet consumers' demands as quickly and effectively as possible.

Question 18

The Consumer Product Safety Commission is an independent laboratory that has power of persuasion only.

Question 19

One concern about product liability is the size of the financial awards won in court.

Question 20

No matter how careful business is regarding the safety of its products, product liability suits are inevitable.

Question 21

The current legal view of "let the seller beware" is

A) caveat vendor.
B) e pluribis unum.
C) norvus ordo seclorum.
D) caveat emptor.

Question 22

All of the following are reasons given for the current obsession with quality except

A) the average consumer demands more.
B) global competitiveness.
C) the Internet.
D) employee satisfaction.

Question 23

All of the following are in the top ten principles of safety except

A) fully investigate product safety incidents.
B) encourage customers to try out the product before purchasing it.
C) report product safety defects promptly.
D) track your product's safety performance.

Question 24

Due diligence means that a company

A) has done sufficient preparatory work to produce a safe product.
B) the company has successfully passed an OSHA safety audit.
C) has taken every possible precautionary step possible and followed all industry standards.
D) has studied the problem extensively.

Question 25

Which of the following is not on the top ten list of safety principles?

A) Build safety into product design.
B) Educate consumers about product safety.
C) Allow a margin of error for the consumer.
D) Learn from your and others' mistakes.

Question 26

The primary responsibility for product safety lies with the

A) consumer.
B) government.
C) producer.
D) Consumer Product Safety Commission.

Question 27

The fact that a company is responsible for the harm done to customers by its product even if it can show that it did its best according to the state of the art in the industry at that time is called

A) strict liability.
B) absolute liability.
C) historical liability.
D) market share liability.

Question 28

The ethical theory based on the concept of duty that suggests that if a product causes harm, the firm should pay the costs of any injury is

A) contractual theory.
B) due care theory.
C) social costs view.
D) caveat vendor.

Question 29

Which of the following is not a dimension of quality listed in the textbook?

A) performance
B) durability
C) status
D) aesthetics

Question 30

Reasons to be concerned about product liability include all of the following except

A) the sheer number of cases.
B) the number of trial attorneys being licensed.
C) the propensity of people to sue when they are unhappy.
D) the growing size of financial awards.

Question 31

The legal principle that anyone in the value chain of a product is liable for harm caused to the user if the product as sold was unreasonably dangerous is

A) strict liability.
B) absolute liability.
C) relative liability.
D) market share liability.

Question 32

The meaning of product quality is uniform to all.

Question 33

All of the following are dimensions of quality except

A) features.
B) conformance.
C) serviceability.
D) objectivity.

Question 34

Which of the following is not a driver of the quest to improve product and service quality?

A) the demands of a competitive marketplace
B) cost controls
C) an increasingly sophisticated consumer base
D) the threat of product liability lawsuits

Question 35

The two central issues of goods and services are

A) price and warranties.
B) reliability and durability.
C) quality and safety.
D) value and function.

Question 36

Which of the following is not one of the top consumer product categories most frequently associated with injuries requiring hospital treatment?

A) sports and recreational activities
B) home maintenance and construction
C) toys and children's products
D) automobiles

Question 37

Which of the following is not an allegation commonly made in product liability suits?

A) The product was improperly manufactured.
B) The product's design was defective.
C) The manufacturer failed to provide satisfactory instructions.
D) The product was produced under inhumane conditions.

Question 38

The ethical theory based on the concept of duty that focuses on the relative vulnerability of the customer is

A) contractual theory.
B) due care theory.
C) social costs view.
D) caveat vendor.

Question 39

The legal view of "let the buyer beware" that prevailed throughout most of history was

A) caveat vendor.
B) e pluribus unum.
C) norvus ordo seclorum
D) caveat emptor.

Question 40

The ethical theory based on the concept of duty that states that firms have a responsibility to comply with the terms of the sale, inform the customer about the product, not misrepresent anything, and not coerce the customer is

A) contractual theory.
B) due care theory.
C) social costs view.
D) caveat emptor.

Question 41

Which of the following is not a strategic priority of the Food and Drug Administration?

A) regulatory science
B) promotion
C) safety and quality
D) globalization

Question 42

Businesses have responded to consumer activism with all of the following efforts except

A) toll-free hot lines.
B) user-friendly Web sites.
C) rebate and discount programs.
D) consumer representatives.

Question 43

One of the strengths of Six Sigma program's has been its

A) laser-like focus on worker satisfaction.
B) increase in customer loyalty.
C) contribution to research in production quality.
D) clarity of process and the steps companies must take to adopt it.

Question 44

The Consumer Product Safety Commission works to reduce the risk of harm from consumer products in all of the following ways except

A) banning consumer products.
B) passing legislation outlawing products.
C) obtaining recall of products.
D) informing and educating consumers.

Question 45

The body of methodologies and techniques for achieving quality that focuses on the number of defects is called

A) Seven Standards.
B) Six Smith.
C) Six Sigma.
D) Seven Severance.

Question 46

Early research conducted in the organization later known as the Food and Drug Administration fed small doses of poison to

A) rats.
B) chimpanzees.
C) the "Death Squad."
D) the "Poison Squad."

Question 47

An important criticism of total quality management is that it

A) tried to do too much.
B) quality means different things to different people.
C) actually took focus off of the customer.
D) focused too much on adherence to standards, taking the enjoyment out of work.

Question 48

Business claims that current product liability law suffers from all of the following problems except

A) inefficiency.
B) bias.
C) raising the costs of litigation.
D) imposition of a hidden tax on consumers.

Question 49

Business's response to consumerism over time has been one of

A) benign neglect.
B) rapid response.
C) ineffective action, followed by improved responses.
D) extreme care.

Question 50

A company that is held responsible for the damage caused by its product in proportion to its percentage of industry sales is subject to

A) strict liability.
B) absolute liability.
C) relative liability.
D) market share liability.

Question 51

The focus of total quality management programs is

A) quality.
B) the customer.
C) efficiency.
D) worker satisfaction.

Question 52

The Food and Drug Administration is part of

A) Housing and Urban Development.
B) the Health and Human Services Department.
C) the Interstate Commerce Commission.
D) the Federal Trade Commission.

Question 53

The initial part of the total quality management process is to

A) define quality in terms of customer expectations and requirements.
B) develop standards and specifications for quality.
C) design efficient production processes.
D) develop customer satisfaction surveys.

Question 54

Programs that attempt to blend all of the functions of a business into a holistic, integrated philosophy built around teamwork, productivity, and customer satisfaction are called

A) Six Sigma programs.
B) total care programs.
C) total quality management programs.
D) customer focus programs.

Question 55

The Food and Drug Administration is involved in the regulation of

A) pet food.
B) weight loss programs.
C) dietary supplements.
D) fast foods.

Question 56

Six Sigma practitioners believe in fixing the ____ rather than the ____.

A) practice; theory
B) product; worker
C) process; product
D) worker; customer

Question 57

Which of the following is not part of the FDA's mission?

A) to help identify and develop new foods and drugs
B) to support better informed decisions about FDA-regulated products
C) to protect the public health
D) to enhance oversight of FDA-regulated products

Question 58

Which of the following is not a way in which the Consumer Product Safety Commission works to reduce the risk of harm from consumer products?

A) developing voluntary standards within an industry
B) issuing and enforcing mandatory standards
C) lobbying Congress to pass new consumer protection laws
D) conducting research on potential product hazards

Question 59

The Food and Drug Administration regulates all of the following except

A) food.
B) drugs.
C) cosmetics.
D) personal care products.

Question 60

The Tylenol case in the 1980s, in which capsules were injected with cyanide, is an example of

A) product extortion.
B) product liability.
C) product tampering.
D) product packaging.

Question 61

Provide a short answer to each of these questions. Be sure to fully explain your answer.
How has business responded to consumer stakeholders over the years? What do you think made business respond more effectively to consumers?

Question 62

With respect to service, consumers are concerned with which of the following?

A) performance
B) building time
C) provider attributes
D) durability

Question 63

Provide a short answer to each of these questions. Be sure to fully explain your answer.
What have been the impacts of new leadership in the CPSC?

Question 64

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Describe the effectiveness of the Consumer Product Safety Commission over the years. What has been the primary influence on its effectiveness?

Question 65

Provide a short answer to each of these questions. Be sure to fully explain your answer.
What has caused the expansion of the doctrine of strict liability concept?

Question 66

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Describe the legal doctrine of absolute liability.

Question 67

Provide a short answer to each of these questions. Be sure to fully explain your answer.
What main issues hurt Takata when the public learned of its recalls of defective airbags? What does this illustrate?

Question 68

The driving force behind guidelines for product liability is which of the following?

A) legal responsibility
B) selling products
C) ethical reasoning
D) immoral people

Question 69

The Consumer Product Safety Improvement Act of 2008 does not cover which of the following?

A) ATVs
B) toy safety
C) cotton
D) phthalates

Question 70

Provide a short answer to each of these questions. Be sure to fully explain your answer.
The Food Safety Modernization Act (FSMA) gives the FDA a mandate to develop a science-based food safety system that addresses hazards from farm to table, putting greater emphasis on the prevention of food-borne illness - a major concern of consumers. Has this law been effective? How has it changed food safety?

Question 71

TQM must emphasize all of the following except?

A) leadership
B) individualism
C) recognition
D) communication

Question 72

Today, the FDA regulates all of these except

A) vaccines
B) blood products
C) prescription drugs
D) medical care

Question 73

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Summarize the total quality management process.

Question 74

Customer service is provided by all of the following except?

A) passing the buck
B) offices of consumer affairs
C) warranties
D) money back guarantees

Question 75

Essential aspects of quality include which of the following?

A) advertising
B) color
C) attributes
D) durability

Question 76

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Describe the major contributions that Six Sigma can make to the business/consumer relationship.

Question 77

Which of the following is not impacted by tort risk?

A) relocation of a new plant
B) selling products
C) expanding operations
D) introducing a new product

Question 78

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Why do businesses want a uniform product liability code?

Question 79

Provide a short answer to each of these questions. Be sure to fully explain your answer.
Why are the food and manufacturing industries particularly susceptible to product liability suits?

Question 80

Provide a short answer to each of these questions. Be sure to fully explain your answer.
What is the controversy over "pink slime"?