Total Quality Management Multiple Choice Questions on “Cost of Quality – 1”.
1. The cost associated with NOT producing quality products or services is called ________
a) Cost of Quality
b) Cost of Poor Quality Product
c) Cost of Mistake
d) Cost of Poor Quality Service
Answer: a
Clarification: The cost associated with NOT producing quality products or services is called the Cost of Quality. It is commonly mistaken as the cost associated with producing quality products or services.
2. Costs associated with improving quality or cost of conformance is called _______
a) Cost of Good Quality
b) Cost of Poor Quality
c) Cost of Improvement
d) Cost of Planning
Answer: a
Clarification: Costs associated with improving the quality or cost of conformance is called the cost of good quality. It is a component of the cost of quality. The cost of quality can be used as a standard measure to study an organization’s performance.
3. Costs associated with non-conformance or the costs due to poor quality is called ______
a) Cost of Good Quality
b) Cost of Poor Quality
c) Cost of Improvement
d) Cost of Planning
Answer: b
Clarification: Costs associated with non-conformance or the costs due to poor quality is called the cost of poor quality. It is a component of the cost of quality. The cost of quality is used to understand, analyze, and improve quality performance.
4. Costs associated with the prevention of non-conformance to requirements is called _______
a) Prevention Costs
b) Appraisal Costs
c) Internal Failure Costs
d) External Failure Costs
Answer: a
Clarification: Costs associated with the prevention of non-conformance to requirements is called Prevention Costs. It is a type of Cost of Good Quality. Cost of Good Quality is a component of the Cost of Quality.
5. Costs associated with appraising a product or service for conformance to requirements is called ______
a) Prevention Costs
b) Appraisal Costs
c) Internal Failure Costs
d) External Failure Costs
Answer: b
Clarification: Costs associated with appraising a product or service for conformance to requirements is called Appraisal Costs. It is a type of Cost of Good Quality. Cost of Good Quality is a component of the Cost of Quality.
6. Mathematically, the cost of quality equals to _______
a) Prevention Costs + Appraisal Costs + Internal Failure Costs + External Failure Costs
b) Prevention Costs + Appraisal Costs + Internal Failure Costs – External Failure Costs
c) Prevention Costs + Appraisal Costs + Internal Failure Costs * External Failure Costs
d) Prevention Costs – Appraisal Costs + Internal Failure Costs + External Failure Costs
Answer: a
Clarification: Mathematically, the cost of quality equals to Prevention Costs + Appraisal Costs + Internal Failure Costs + External Failure Costs. Prevention Costs and Appraisal Costs belong to the Cost of Good Quality. Internal Failure Costs and External Failure Costs belong to the Cost of Poor Quality.
7. Which of the following does not belong to Prevention Costs?
a) Marketing research
b) Customer/User perception surveys
c) Design quality progress reviews
d) Lost sales
Answer: d
Clarification: Marketing research, Customer/User perception surveys, and Design quality progress reviews fall under the category of Prevention Costs. Lost sales fall under the category of External Failure Costs.
8. Which of the following does not belong to Prevention Costs?
a) Design support activities
b) Product design qualification test
c) Service design qualification
d) Downgraded end-product or service
Answer: d
Clarification: Design support activities, Product design qualification test, and Service design qualification fall under the category of Prevention Costs. Downgraded end-product or service fall under the category of Internal Failure Costs.
9. Which of the following does not belong to Internal Failure Costs?
a) Rework due to Design Changes
b) Scrap due to Design Changes
c) Design Corrective Action
d) Returned Goods
Answer: d
Clarification: Rework, Scrap and Design Corrective Action fall under the category of Internal Failure Costs. Returned Goods fall under the category of External Failure Costs. Internal and External Failure Costs fall under the category of Cost of Poor Quality.
10. Which of the following does not belong to Internal Failure Costs?
a) Uncontrolled Material Losses
b) Purchased Material Replacement Costs
c) Re-inspection / Retest Costs
d) Supplier Reviews
Answer: d
Clarification: Uncontrolled material losses, Purchased material replacement costs, Re-inspection / Retest Costs fall under the category of Internal Failure Costs. Supplier reviews fall under the category of Prevention Costs.
11. Which of the following does not belong to External Failure Costs?
a) Complaint investigations
b) Warranty claims
c) Liability costs
d) Supplier quality planning
Answer: d
Clarification: Complaint investigations, Warranty claims, and Liability costs fall under the category of External Failure Costs. Supplier Quality Planning falls under the category of Prevention Costs.
12. Quality improvement, Quality education, and Quality performance reporting fall under the category of _______
a) Appraisal Costs
b) Prevention Costs
c) Internal Failure Costs
d) External Failure Costs