Question 1

In a Cost of Quality (COQ) report, maintenance costs for test equipment would be classified as:
A) Prevention costs.
B) Retention costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

Maintenance costs for test equipment are classified as appraisal costs because they are associated with activities to ensure that products or services meet quality standards before they reach the customer. This includes costs related to the inspection and testing of products.

Question 2

In a Cost of Quality (COQ) report, costs to acquire and install training equipment would be classified as:
A) Prevention costs.
B) Retention costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

The cost to acquire and install training equipment would be considered a prevention cost, as it is an investment made to prevent defects or errors from occurring in the training process.

Question 3

In a Cost of Quality (COQ) report, costs to acquire and install training equipment would be classified as:
A) Prevention costs.
B) Retention costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

Prevention costs are costs incurred to prevent defects from occurring, and this includes the costs of acquiring and installing training equipment to ensure that employees are trained properly and can perform their jobs without making errors that can lead to defects.

Question 4

A graphical representation of the variation in a given set of data is a(n):
A) Control chart.
B) Pareto diagram.
C) Histogram.
D) Ishikawa diagram.
E) Cause-and-effect diagram.

Accepted Answer

A histogram is a graphical representation of the variation in a given set of data. It shows the frequency distribution of a set of continuous data. The data is divided into intervals, and the height of each bar represents the frequency of data points within that interval.

Question 5

Inspection costs for reworked units would be classified, for Cost of Quality (COQ) reporting purposes, as:
A) Prevention costs.
B) Retention costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

Inspection costs for reworked units are incurred after a defect has been identified and the unit has already failed to meet quality standards. Therefore, this cost would be classified as an internal failure cost under Cost of Quality (COQ) reporting purposes.

Question 6

Cycle time efficiency is:
A) Defined as the ratio of time spent on value-added activities to the sum of time spent on value-added plus non-value-added activities.
B) Also referred to as process efficiency.
C) Defined as the ratio of throughput to resources used.
D) The ratio of throughput to the amount of product in backlog status.
E) Not typically part of a comprehensive framework for managing and controlling quality since it is a nonfinancial performance indicator.

Accepted Answer

Cycle time efficiency is specifically defined as the ratio of time spent on value-added activities to the sum of time spent on value-added plus non-value-added activities, making option A the correct answer. Option B is incorrect because process efficiency refers to the overall effectiveness of a process in delivering an output that meets the customer's needs. Option C is incorrect because it describes the productivity ratio of throughput to resources used. Option D is incorrect because it describes the ratio of throughput to the amount of product in backlog status. Option E is incorrect because cycle time efficiency is often used as a performance indicator in quality management systems.

Question 7

The cost of conformance in a Cost-of-Quality (COQ) reporting system includes:
A) Prevention costs and appraisal costs.
B) Internal failure costs and external failure costs.
C) Prevention costs and internal failure costs.
D) Appraisal costs and internal failure costs.
E) Prevention costs and external failure costs.

Accepted Answer

The cost of conformance in a Cost-of-Quality (COQ) reporting system includes prevention costs and appraisal costs. Prevention costs are expenses related to preventing defects before they happen, such as training and process improvement initiatives. Appraisal costs are expenses associated with evaluating products, processes, and systems to ensure quality standards are met, such as testing and inspections.

Question 8

In a typical Cost of Quality (COQ) report, instructor fees for quality training would be classified as:
A) Prevention costs.
B) Retention costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

Instructor fees for quality training are classified as prevention costs because they are incurred to prevent defects from occurring in the first place. Prevention costs are costs incurred to avoid poor quality, and they include activities such as quality planning, training, and process control.

Question 9

Which of the following statements about nonfinancial performance indicators of quality is not true?
A) They can be useful predictors of future financial performance.
B) Generally speaking, they are costlier to generate than financial measures of quality.
C) They are timelier than financial data.
D) They are readily interpretable by operating personnel.
E) They help to identify precise quality-related problems.

Accepted Answer

Generally speaking, nonfinancial measures of quality are less costly to generate than financial measures. Financial measures may involve gathering and analyzing financial data, whereas nonfinancial measures may involve collecting and analyzing customer feedback or conducting quality assessments of products or services.

Question 10

In a Cost of Quality (COQ) report, sales returns and allowances due to quality deficiency would be classified as:
A) Prevention costs.
B) Salvage costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

Sales returns and allowances due to quality deficiency are considered external failure costs because they occur after the product has been delivered to the customer and are a result of the product not meeting their expectations or requirements.

Question 11

A graph that depicts successive observations of an operation taken at constant intervals is a(n):
A) Control chart.
B) Pareto diagram.
C) Histogram.
D) Ishikawa diagram.
E) Cause-and-effect diagram.

Accepted Answer

A Control chart is specifically designed for tracking the performance of a process over time by plotting data points on a graph at regular intervals. This enables quality control professionals to monitor the stability of a process and identify any trends or patterns that may indicate changes in performance. A Pareto diagram is used for identifying the most common sources of defects or quality issues, a histogram is used for showing the distribution of a set of data, an Ishikawa diagram is used for identifying the potential causes of a problem, and a cause-and-effect diagram is used for tracking the relationships between different factors that influence a process. Therefore, A is the best choice for the given description.

Question 12

In a Cost of Quality (COQ) framework, rework costs incurred before shipment of product are considered:
A) Internal failure costs.
B) Retention costs.
C) Appraisal costs.
D) Prevention costs.
E) External failure costs.

Accepted Answer

Rework costs incurred before shipment of product are considered internal failure costs in a Cost of Quality framework. Internal failure costs are costs incurred as a result of defects being discovered before the product is shipped to the customer. Rework is a corrective action taken to fix a defect, which is why it falls under this category.

Question 13

For Cost of Quality (COQ) reporting purposes, contribution margin of canceled sales orders due to quality deficiency would be classified as:
A) Prevention costs.
B) Appraisal costs.
C) Internal failure costs.
D) External failure costs.
E) A lost sale, not a cost of quality.

Accepted Answer

The contribution margin of canceled sales orders due to quality deficiency would be classified as external failure costs. External failure costs are incurred when a product does not meet customer requirements and results in lost sales or customer dissatisfaction.

Question 14

Costs incurred because of poor quality found through appraisal prior to delivery of the product to the customer are, in a Cost-of-Quality (COQ) reporting framework, considered:
A) External failure costs.
B) Appraisal costs.
C) Prevention costs.
D) Internal failure costs.
E) Conformity costs.

Accepted Answer

Costs incurred because of poor quality found through appraisal prior to delivery of the product to the customer are considered internal failure costs, as they reflect the cost of defects found before delivery. External failure costs would be costs incurred after delivery and include things like warranty claims or product recalls. Appraisal costs are the costs of inspecting and testing products to ensure they meet quality standards, while prevention costs are the costs of implementing quality control measures to prevent defects from occurring in the first place. Lastly, conformity costs are the costs of ensuring that products or services adhere to applicable regulations or standards.

Question 15

In a Cost-of-Quality (COQ) reporting framework, costs incurred in conjunction with the measurement and analysis of data to ascertain conformity of products and services to specification are properly classified as:
A) External failure costs.
B) Appraisal costs.
C) Internal failure costs.
D) Prevention costs.
E) Value-added costs.

Accepted Answer

The costs incurred for measuring and analyzing data to ensure conformity of products and services to specifications are classified as appraisal costs in a COQ reporting framework. Appraisal costs are those costs incurred to prevent defects from occurring or to capture defects before they reach the customer. Examples of appraisal costs are inspection, testing, and quality audits.

Question 16

In a Cost of Quality (COQ) reporting framework, scrap costs because of a quality failure would be classified as:
A) Prevention costs.
B) Salvage costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

Scrap costs due to a quality failure would be classified as internal failure costs in a Cost of Quality (COQ) reporting framework. Internal failure costs are the costs incurred as a result of production failure or defects within the organization which are detected before products reach to customers such as scrap and rework costs.

Question 17

Which of the following is not an external nonfinancial measure of quality?
A) Number of defective parts produced.
B) Number of defective units shipped to customers.
C) Number of customer complaints.
D) Delivery delays (e.g., difference between scheduled and actual delivery date).
E) Percentage of products that experience early or excessive failure.

Accepted Answer

The number of defective parts produced is an internal nonfinancial measure of quality, as it reflects the organization's own manufacturing processes rather than customer perceptions or outcomes.

Question 18

All the following are examples of internal nonfinancial quality indicators except:
A) Number of customer complaints.
B) Process yield (i.e., ratio of good outputs to total output).
C) Productivity (i.e., ratio of acceptable output to resource inputs).
D) Plant safety record (e.g., days since last major accident).
E) Throughput.

Accepted Answer

The answer of All the following are examples of internal...

Question 19

In a Cost-of-Quality (COQ) reporting framework, the "cost of nonconformance" includes:
A) Prevention costs and appraisal costs.
B) Internal failure costs and external failure costs.
C) Prevention costs and internal failure costs.
D) Appraisal costs, internal failure costs, and external failure costs.
E) Prevention costs and external failure costs.

Accepted Answer

The cost of nonconformance refers to the costs incurred as a result of failing to meet quality standards, and includes internal failure costs (such as rework and scrap) and external failure costs (such as customer complaints and warranty claims). It does not include prevention costs (costs incurred to prevent defects in the first place) or appraisal costs (costs incurred to evaluate and measure quality). Therefore, the best choice is B.

Question 20

For Cost of Quality (COQ) reporting purposes, materials inspection costs would normally be classified as:
A) Salvage costs.
B) Retention costs.
C) Appraisal costs.
D) Internal failure costs.
E) External failure costs.

Accepted Answer

Materials inspection costs fall under the category of appraisal costs, which include the cost of any activities intended to detect quality problems, such as inspection, testing, and auditing. Appraisal costs are incurred to determine whether a product or service conforms to quality requirements and are a preventive measure to avoid internal and external failure costs. Salvage costs are the costs incurred in disposing of a defective product. Retention costs are related to maintaining records and information related to quality control. Internal failure costs include any costs incurred in addressing defects discovered in the production process, such as the cost of reworking a product or the cost of scrap. External failure costs are those that arise after a product has been delivered to a customer, such as warranty claims and product recalls.

Quiz 17: The Management and Control of Quality

In a Cost of Quality (COQ) report, maintenance costs for test equipment would be classified as:

In a Cost of Quality (COQ) report, costs to acquire and install training equipment would be classified as:

In a Cost of Quality (COQ) report, costs to acquire and install training equipment would be classified as:

A graphical representation of the variation in a given set of data is a(n) :

Inspection costs for reworked units would be classified, for Cost of Quality (COQ) reporting purposes, as:

Cycle time efficiency is:

The cost of conformance in a Cost-of-Quality (COQ) reporting system includes:

In a typical Cost of Quality (COQ) report, instructor fees for quality training would be classified as:

Which of the following statements about nonfinancial performance indicators of quality is not true?

In a Cost of Quality (COQ) report, sales returns and allowances due to quality deficiency would be classified as:

A graph that depicts successive observations of an operation taken at constant intervals is a(n) :

In a Cost of Quality (COQ) framework, rework costs incurred before shipment of product are considered:

For Cost of Quality (COQ) reporting purposes, contribution margin of canceled sales orders due to quality deficiency would be classified as:

Costs incurred because of poor quality found through appraisal prior to delivery of the product to the customer are, in a Cost-of-Quality (COQ) reporting framework, considered:

In a Cost-of-Quality (COQ) reporting framework, costs incurred in conjunction with the measurement and analysis of data to ascertain conformity of products and services to specification are properly classified as:

In a Cost of Quality (COQ) reporting framework, scrap costs because of a quality failure would be classified as:

Which of the following is not an external nonfinancial measure of quality?

All the following are examples of internal nonfinancial quality indicators except:

In a Cost-of-Quality (COQ) reporting framework, the "cost of nonconformance" includes:

For Cost of Quality (COQ) reporting purposes, materials inspection costs would normally be classified as: