Which of the following statements relating to total quality management is TRUE?
A) The only effect of internal failure is loss of material.
B) Poor quality generally does not increase the inventory level or lead times.
C) To produce 100 good units in a process with a 20 percent defective rate, the company must produce a total of 120 units.
D) High product quality in manufacturing can have significant market implications for a firm.

Question

Quizplus · Accepted Answer

High product quality in manufacturing can lead to increased customer satisfaction, which can result in customer loyalty and positive word-of-mouth advertising. This can have significant market implications and impact a firm's bottom line. Options A, B, and C are all false statements. Internal failure can result in additional costs beyond just loss of material, poor quality can increase inventory levels and lead times, and producing 100 good units in a process with a 20 percent defective rate would actually require producing 125 units.

Which of the Following Statements Relating to Total Quality Management