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NO.1 Which statement best describes total quality management (TQM)?
A. TQM emphasizes reducing the cost of inspection.
B. TQM emphasizes better statistical quality control techniques.
C. TQM emphasizes doing each job right the first time.
D. TQM emphasizes encouraging cross-functional teamwork.
Answer: C
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Explanation:
TQM establishes quality as an organizational objective and views it as a major component of the
organization's service to its customers. It emphasizes employee training and commitment,
productservice design and production, and customer service. Ordinarily, the quality of a product or
service is as important to customers as cost and timeliness. Superior product quality is not merely
the result of more inspection, better statistical quality control, and cross-functional teamwork.
Manufactures must make fundamental changes in the way they produce products and do each job
right the first time.
NO.2 Focusing on customers, promoting innovation, learning new philosophies, driving out fear, and
providing extensive training are all elements of a major change in organizations. These elements are
aimed primarily at:
A. Copying leading organizations to better compete with them.
B. Focusing on the total quality of products and services.
C. Being efficient and effective at the same time, in order to indirectly affect profits.
D. Managing costs of products and services better, in order to become the low-cost provider.
Answer: B
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Explanation:
TQM is a comprehensive approach to quality. It treats the pursuit of quality as a basic organizational
function that is as important as production or marketing. TQM is the continuous pursuit of quality in
every aspect of organizational activities through (1) a philosophy of doing it right the first time; (2)
employee training and empowerment; (3) promotion of teamwork; (4) improvement of processes;
and (5) attention to satisfaction of customers, both internal and external. TQM emphasizes the
supplier's relationship with the customer, identifies customer needs, and recognizes that everyone
in a process is at some time a customer or supplier of someone else, either inside or outside of the
organization.
NO.3 Which of the following is a characteristic of total quality management (TQM)?
A. Management by objectives.
B. On-the-job training by other workers.
C. Quality by final inspection.
D. Education and self-improvement.
Answer: D
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Explanation:
TQM is the continuous pursuit of quality in every aspect of organizational activities. One of the
means of achieving this is through employee training and empowerment.
NO.4 A traditional quality control process in manufacturing consists of mass inspection of goods
only at the end of a production process. A major deficiency of the traditional control process is that:
A. It is expensive to do the inspections at the end of the process.
B. It is not possible to rework defective items.
C. It is not 100% effective.
D. It does not focus on improving the entire production process.
Answer: A
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Explanation:
The process used to produce the goods is not thoroughly reviewed and evaluated for efficiency and
effectiveness. Preventing defects and increasing efficiency by improving the production process
raises quality standards and decreases costs.
NO.5 A company with many branch stores has decided to use its best-performing store as a
benchmark organization for the purpose of analyzing the accuracy and reliability of branch store
financial reporting.
Which one of the following is the most likely measure to be included in a financial benchmark?
A. High turnover of employees.
B. High level of employee participation in setting budgets.
C. High amount of bad debt write-offs.
D. High number of suppliers.
Answer: C
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Explanation:
Internal benchmarking is the application of best practices in one part of the organization (e.g., a
high-performing branch store) to its other parts (other branches). This process requires, among
other things, use of quantitative and qualitative measures. A key indicator for financial performance
measurement is the amount of bad debt write-offs. A high level of bad debt write-offs could
indicate fraud, which would compromise the accuracy and reliability of financial reports. Bad debt
write-offs may result from recording fictitious sales.
NO.6 In which of the following organizational structures does total quality management (TQM) work
best?
A. Hierarchal.
B. Teams of people from the same specialty.
C. Teams of people from different specialties.
D. Specialists working individually.
Answer: C
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Explanation:
TQM advocates replacement of the traditional hierarchal structure with teams of people from
different specialties. This change follows from TQM's emphasis on empowering employees and
teamwork. Employees should (1) have proper training, necessary information, and the best tools;
(2) be fully engaged in the decision process; and (3) receive fair compensation. If such empowered
employees are assembled in teams of individuals with the required skills, TQM theorists believe
they will be more effective than people performing their tasks separately in a rigid structure.
NO.7 The use of teams in total quality management (TQM) is important because:
A. Well-managed teams can be highly creative and are able to address complex problems better
than individuals can.
B. Teams are quicker to make decisions, thereby helping to reduce cycle time.
C. Employee motivation is higher for team members than for individual contributors.
D. The use of teams eliminates the need for supervision, thereby allowing a company to become
leaner and more profitable.
Answer: A
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Explanation:
Teams can use the diverse knowledge and skills of all team members. Employee involvement means
training and empowering employees to harness their creativity for problem solving. Quality control
circles are used to obtain input from employees and to locate the best perspective on problem
solving.
NO.8 Which of the following costs of quality is a failure cost?
A. Systems development costs.
B. Costs of inspecting in-process items.
C. Contract penalty for delivery of nonconforming goods.
D. Costs of quality circles.
Answer: C
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Explanation:
Failure costs are incurred after defective output has been removed from production. A contract
penalty for faulty goods is an example of an external failure cost.
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