C207 2
Which of the following could be an appropriate key performance indicator (KPI)? a) company mission b) consumer return rate c) holiday party planning d) corporate logo
B. A consumer return rate is a measurable indicator that might be important for someone studying customer behavior in a retail store. The other three answers are not quantifiable.
A net promoter score is determined from results, on a scale from 0 to 10, of a question about the customer's opinion of the company. What are the categories used in NPS? a) Good, Average, and Bad b) Promoters, Passives, and Detractors c) Success, and Improvement needed d) Supporter, Unknown, and Indifferent party
B. A net promoter score is determined by the number of promoters and detractors to determine customer loyalty and opinion.
What is a balanced scorecard? A management tool that measures key performance indicators across four key organization areas
A balanced scorecard is a management tool that measures key performance indicators across four key areas of an organization.
What percent of the data in a normal distribution is between the mean and two standard deviations above the mean? a) 47.7 percent b) 50.0 percent c) 68.3 percent d) 95.4 percent
A. 95.4 percent of the data is located between two standard deviations below the mean and two standard deviations above the mean. Half of this data is located between the mean and two standard deviations above the mean.
A Pareto chart is a type of ________. a) bar chart b) run chart c) flowchart d) check sheet
A. A Pareto chart is a type of bar chart.
A ___________________ is created when a researcher combines data (e.g. prices) from multiple items without weighing any of them more significantly than the others. a) simple composite index b) weighted composite index c) simple index number d) none of the above
A. A simple composite index is created when a researcher gathers data from many different sources without weighing any data more significantly than any other data. Usually, this means that there is only one good or service being measured so that all of the information is weighted equally.
Which of the following statements about a process is false? a) Activities do not have to be completed in order. b) A process produces an output. c) Viewing work as a process allows you to evaluate steps and the interaction among steps. d) Others should be able to repeat the process to achieve similar results.
A. Activities do not have to be completed in order. To be considered a process, the activities involved should be completed in a specific order.
Which one of the following is NOT an example of big data? a) The amount of money collected by taxes b) The results of a one-question survey about voting preferences collected from many c) Weights of people in the city of Houston, Texas d) Incomes of people from St. Louis
A. Although the amount of money collected by taxes is large, it is only one number (data point). All of the other answers contain more information than just one data point.
Which of the following is a disadvantage of key performance indicators (KPIs)? a) KPIs are often only a rough guide. b) KPIs can't be used across an entire organization. c) KPIs make it more difficult to quantify performance. d) KPIs shield management from developing an understanding of a company's performance.
A. Answers B is not a disadvantage and answers C and D are not true because KPIs attempt to quantify performance and help management understand a company's performance.
What is an advantage of a net promoter score system of measurement? a) NPS is easy to calculate and understand. b) NPS always reveals why a customer is not satisfied. c) NPS makes it easy to determine the precise area of dissatisfaction for customers. d) NPS allows companies to focus on their own operations instead of benchmarking against industry leaders.
A. Answers C and D are not true, and answer B is a disadvantage. Net promoter scores are easy to calculate and understand.
Company A predicts 45 customer visits for the week and actually gets 50 customer visits for the week. Company B predicts a 5 percent decrease in customer visits and gets an actual decrease of 3 percent in customer visits. Is the variance for company A favorable or unfavorable? Is the variance for company B favorable or unfavorable? a) Favorable, Favorable b) Favorable, Unfavorable c) Unfavorable, Favorable d) Unfavorable, Unfavorable
A. Both outcomes are favorable. Company A gets more customers than expected and company B did not lose as many customers as it thought it would.
Where would you find control limits? a) on a control chart b) on a histogram c) on a prioritization matrix d) on a fishbone diagram
A. Control limits are the maximum value (the upper control limit) and the minimum value (the lower control limit) that the process should perform within. A control chart displays the process performance as well as the control limits.
The probability that Junkins Food launches a new product in November is 55%. The probability that the director of new products plans a vacation in November is 8.3%. If these events are independent, what is the probability that the director of new products is on vacation when a new product launches in November? a) 4.6% b) 14.6% c) 46.7% d) 63.3%
A. The two events are independent; therefore, the probability both happen is the product of the probability of each. 55x8.3=4.57 or 4.6
Which of the following statements about metrics is false?
Metrics can help expose trends, but teams must use statistics—not metrics—to uncover root causes. Metrics can be used to expose trends and to uncover root causes.
Question 15 If a company has a positive variance against its target for a performance measure, what does that mean? a) The company fell short of its target performance goal. b) The company exceeded its target performance goal. c) The company's performance was negatively on track. d) The company's balanced scorecard is positive for all factors.
B. A positive variance means that the actual performance was higher than the target. Variance=actual performance−target performance.
A SIPOC Diagram is very helpful in following a whole process of a company. It stands for Supplier, Input, Process, Output, and _______. a) Company b) Customer c) Coordination d) Cash
B. The customer is the last step when following a whole process in a SIPOC diagram.
The quality management team at Snoop Diagnostics wants to understand how strong the relationships are between two sets of items. They set up an L-shaped matrix diagram and place one set of items into the rows of the matrix and the other set of items into the matrix's columns. They use stars, diamonds, and plus-signs to mark the strength of the relationships between the items. When they are done, they notice that some of the cells in the matrix are blank but decide to move on anyway. They analyze the chart, make plans to address the trends they see and then post the chart for the rest of the organization to see. What is wrong with the team's process? a) None of the cells in the diagram should be left blank. b) The team forgot to create a legend to explain the symbols they used. c) The team should have used a T-shaped matrix. d) There is nothing wrong with the team's process; they did everything that they needed to do to create an efficient matrix diagram
B. The team needs to include a legend to explain what the stars, diamonds, and plus-signs mean.
What is the reliability of the following update system: There is a 60 percent chance someone will check their email about an update and a 50 percent chance they will pick up their phone to learn about the same update. 80Percent
Correct! This is parallel process. Therefore, the reliability is 1−(P(No Email)×P(No Phone))=1−(0.4×0.5)=1−0.2=0.8=80 percent
Which of the following tools is not used to evaluate numerical data? a) a control chart b) a histogram c) a scatter diagram d) a flowchart
D. A flowchart shows the sequence of steps that make up a process—it does not contain numerical information.
Which of the following is an advantage of key performance indicators (KPIs)? a) KPIs do not require frequent maintenance and monitoring. b) KPIs are inexpensive and easy to create. c) KPIs are simple to change once created. d) KPIs can be used as a tool across an entire organization.
D. Answers A and C are not advantages, and answer B is not true as KPIs are expensive to create. KPIs are able to be used across an organization which is important when understanding the impact of each member in an organization.
True or False? "SMART" criteria is an acronym for small, manageable, accepted, reliable, timely. Often KPIs will follow "SMART" criteria for different company goals.
False Correct. This is a false statement. "SMART" criteria stands for specific, measurable, attainable, relevant, and time-bound. The key word that entirely does not fit is "small" KPIs usually are applied to quantify company-wide goals
True or False? A company's strategy for evolving a company in the long-term should not be considerate of employee's short-term goals.
False Correct. This is a false statement. A company's strategy is balanced between evolving the company over time and short-term (often numerical) goals of the employees and managers.
True or False? Results-based management tracks and displays many complex indicators to better evaluate performance.
False Correct. This is a false statement. Results-based management does not have many complex indicators, but rather it simplifies the data to better allow for a constant change of individual's roles as their performance is evaluated.
True or False? The balanced scorecard for a company measures the standard industry-defined KPIs for each company.
False Correct. This is a false statement. The balanced scorecard is unique for each company. A company chooses which KPIs to measure in accordance with its own motivations and goals
True or False? An advantage to balanced scorecards is that they illustrate a full picture of a company's performance, especially financial data.
False Correct. This statement is false. A balanced scorecard does not illustrate a full picture of a company's performance because it is not possible to take into account all of the variables that might have an effect
True or False? When collecting data on a specific topic, check sheets can be adapted by the different individuals who are collecting information, to allow them to tabulate data in whatever way works best for them
False Correct. This statement is false. A check sheet ensures that everyone collecting data is compiling and recording it in a similar way. The structured format for recording information on check sheets enhances consistency in the collection process.
True or False? Because criterion-referenced tests compare an individual to other individuals, it is extremely rare for an entire class to fail a test.
False Correct. This statement is false. A norm-referenced test compares an individual to other individuals. It is incredibly rare that an entire class will fail a norm-referenced test. A criterion-referenced test compares an individual to defined standards that are not associated with other individuals
True or False? The members of the government and the population often agree on their goals and priorities and therefore are in agreement as to how to allocate the resources
False Correct. This statement is false. Although many people may have similar beliefs, individuals often hold different priorities within those beliefs and therefore spending of public money can be a very difficult task
True or False? Prevalence measures the percent of a population with a disease while incidence measures the number of a population with a disease at a given time.
False Correct. This statement is false. Although prevalence measures the percent of a population with a disease, incidence measures the percent of a population who has contracted the disease over a recent time period.
True or False? Epidemiology is not very important to public health and medical professionals when making decisions
False Correct. This statement is false. Epidemiology is vitally important to understanding the distribution and prevention of diseases throughout a population.
True or False? A Net Promoter Score is able to capture the precise area of dissatisfaction.
False Correct. This statement is false. The NPS does not necessarily explain "why" a customer is not satisfied. Gaining insight into the area of dissatisfaction requires more cooperation from dissatisfied customers.
Why should practitioners take a systems approach when implementing process changes?
because a change to one part of the system will likely affect other parts of the system Correct! Because the parts of a system are often interrelated, changes to one part of the system will likely affect other parts as well so practitioners will need to evaluate the whole system when they make changes to any part of it.
Why do you need quality control processes if your quality assurance measures are effective?
because defects can still occur, even with the best quality assurance processes in place Correct! Defects can still occur, even with the best quality assurance processes in place
Your quality management processes should monitor ________
both the products you make and the processes you use to make them. Quality management encompasses both quality control and quality assurance, so it includes monitoring of both products and processes.
Your quality management processes should monitor ________.
both the products you make and the processes you use to make them. Quality management encompasses both quality control and quality assurance, so it includes monitoring of both products and processes.
True or False? A run chart is a simple way to illustrate performance measures over a period of time
True Correct. This statement is true. In a run chart, performance measurements are collected at regular time intervals and plotted on a line chart to show trends and aberrations in performance
True or False? One of the disadvantages of using KPIs is that they are expensive and time-consuming to set up and use.
True Correct. This statement is true. KPIs are expensive and time-consuming to set up and then need a lot of maintenance to ensure that the indicators being measured are meaningful in the context of the current environment.
True or False? A Net Promoter Score is important when looking at customer satisfaction and loyalty.
True Correct. This statement is true. NPS is a specific performance measurement that categorizes a company's customers into three groups to determine if the customer is loyal and would recommend the product or service to a friend
True or False? Performance measures can be used to assess the performance of an entire organization, as well as an individual contributor.
True Correct. This statement is true. Performance measures can be used to assess the performance and efficiency of an entire organization, a department, as well as an individual contributor.
True or False? Results-based management uses established terms to continuously measure and evaluate performance.
True Correct. This statement is true. Results-based management uses clearly defined terms to constantly measure and analyze performance
True or False? The US government often uses cost-benefit analysis to try and most efficiently deal their resources to the places where they have the greatest impact
True Correct. This statement is true. The US government uses cost-benefit analysis to achieve their goals and better allocate their resources
What do the control limits on a control chart show?
the minimum and maximum values that should not be exceeded Correct. The upper and lower control limits show the maximum and minimum values that the process should perform within
A __________ measures one quantity in relation to another quantity. a) proportion b) incidence c) rate d) ratio
d. A ratio measures one quantity in relation to another quantity.
Which of the following statements is false? a. Just-in-time systems help to ensure that resources are not wasted. b. In a just-in-time system, results are delivered exactly when needed and only when needed. c. Just-in-time systems force teams to produce high-quality results in their processes. d. In a just-in-time system, accurate forecasts ensure that results are ready when customers need them.
d. In a just-in-time system, accurate forecasts ensure that results are ready when customers need them. Correct; this is a false statement. In just-in-time systems, products and results are created in response to customer demands, not to forecasts.
The ultimate goal of a just-in-time system is ________.
one-piece flow Correct. The ultimate goal of a just-in-time system is the continuous movement and creation of a single piece based strictly on customer demand—one-piece flow
One of the machines that Bilal is working on will not work because a part has been incorrectly inserted into the machine. This is an example of what Lean concept?
poka-yoke Correct. A poka-yoke device will prevent an error or defect from being produced if a part or product is in the incorrect sequence or position.
Six Sigma processes strive to produce no more than ________ defects per million outputs
3.4 Correct! A six-sigma level of quality ensures that a process produces no more than 3.4 defects per million outputs
Determine the Mean, Median, and Mode (in that order) from the following test results. 23, 54, 67, 71, 72, 74, 74, 75, 77, 77, 77, 78, 80, 81, 81, 83, 84, 86, 89, 89, 89, 89, 95, 99, 100
78.56, 80, 89 The mean is 78.56 as it is the result of the sum of the numbers, 1964, divided by 25, the count of numbers. The median is 80 as it is the 13th number out of 25 ordered numbers. The mode is 89 as it shows up 4 times and no other data point shows up as many times.
Town A has three times as many people as Town B. Town A has twice as many people with a disease as Town B. Which town would you visit, all other things being the same if you were to meet ten people in either town? (in other words, which town has a lower frequency for this disease) a) Town A b) Town B c) Town A and B have the same frequency d) There's not enough information
A. If Town A has three times as many people but only twice as many with the disease, it means that the disease is less prevalent in Town A than Town B. Therefore, you'd be less likely to get the disease in Town A if you were to come into contact with the same number of people in either town.
Which one of the following is an example of Item Response Theory? a) A coach gives his player a challenge to run around 6 cones in a certain amount of time. The player easily succeeds at this challenge. The coach then adds 4 cones and tells the player to try the new challenge in the same amount of time. b) A teacher notices that the student is not paying attention. The teacher calls on the student to respond to a question. The student does not know the answer. c) A student is given a twenty question test. After the first ten questions about grammar, the student proceeds to the next ten questions about vocabulary. d) An employee is hired for a position. Once the employee gets there he is given different duties than he was hired for because his original responsibilities are not needed.
A. Item Response Theory is when an individual is measured on a set of questions or a test. The results then determine the next set of questions or next test they'll receive.
Performance measures are used to evaluate the _______ of an individual or group by using data collection and _________. a) efficiency, analytics b) efficiency, surveys c) understanding, analytics d) understanding, surveys
A. Performance measures are used to evaluate the efficiency of an individual or group by using data collection and analytics. Understanding is not correct while surveying is already part of data collection and therefore would be redundant.
____________ counts all of the existing cases of a disease, while ______________ only counts new cases. a) Prevalence and incidence b) Rate and ratio analysis c) Ratio analysis and rate d) Incidence and prevalence
A. Prevalence counts all of the existing cases of a disease, while incidence only counts new cases.
Chester is showing his team how to uncover and fix the defects that their process has produced. What is he helping his team do? a) quality control b) SWOT analysis c) quality postmortem analysis d) quality assurance
A. Quality control activities help teams recognize and take action once a problem has happened.
Results-based management does NOT need which of the following? a) Statistically complex indicators b) Constant monitoring c) Collaboration between all participants d) A common goal among everyone involved
A. Results-based management uses simple indicators in order to be more flexible to the constant changes of running a business.
"Where you enact the change on a larger scale, making it a part of normal operations." This is which step in the PDCA cycle? a) Act b) Plan c) Check d) Do
A. The Act step is where you enact the change on a larger scale, making it a part of normal operations.
If the United States had 300 Olympic athletes and 60 of them won a medal while France had 100 Olympic athletes and 9 of them won a medal, which country had a higher prevalence of Olympic athletes winning medals? By what percent? a) United States, 11 percent b) United States, 51 percent c) France, 33 percent d) France, 51 percent
A. The United States had 20 percent (60/300) of their Olympians medal while France had 9 percent (9/100) of their Olympians medal. Therefore, medaled Olympians were more prevalent in the United States Olympians than French Olympians by 11 percent.
The greatest variance in scores occurs if ___ percent of the class gets each question correct. a) 50 b) 68.3 c) 95.4 d) 100
A. The greatest variance occurs when the observed score has a 50 percent chance of being correct.
In the military, a cost-benefit analysis might not be easily evaluated. Because of this, the military often uses: a) a cost-effective analysis. b) a criterion-referenced test. c) item response theory. d) weighted composite index.
A. The military determines the cost of achieving a goal and determines if it wants to continue with it.
A company is trying to determine their net promoter score. 100 people respond to a survey of whether they would recommend the company to a friend. On a scale from 0 to 10, 22 people answered with a 0 to 6, 45 people answered with a 7 or 8, and 33 people answered with a 9 or 10. What is the company's net promoter score? a) 11 percent b) 12 percent c) 22 percent d) 55 percent
A. The net promoter score is determined by the percent of promoters minus the percent of detractors. 22 percent of people (22/100) are detractors, and 33 percent of people (33/100) are promoters. 33-22-11 percent
A company is trying to determine their net promoter score. If their net promoter score is lower than the industry average, they will begin an initiative to improve customer satisfaction. The industry average net promoter score is 12 percent. 200 people respond to a survey of whether they would recommend the company to a friend. On a scale from 0 to 10, 40 people answered between 0 and 6, 105 people answered with either a 7 or 8, and 55 people answered with either a 9 or 10. What is the company's net promoter score? a) 7.5 b) 15 c) 25 d) 40
A. The net promoter score is the promoters minus the detractors. 20 percent of people (40200) are detractors, and 27.5 percent of people (55200) are promoters. The company should begin its initiative to improve customer satisfaction.
There is a 20 percent chance that Charlie's company will merge with another company. If there is a merger, there is an 80 percent chance Charlie will have to fire three people from his team. There is a 15 percent chance Charlie will have to fire three people from his team no matter what. What is the likelihood there will be a merger, and Charlie will have to fire three people from his team? a) 16% b) 18% c) 28% d) 35%
A. The probability of a merger is 20 percent (P(merger)=0.20), and the probability of Charlie having to fire three people if there is a merger is 80 percent (P(fire|merger)=0.80). Therefore to determine the likelihood of a merger and Charlie firing three people, these probabilities are multiplied together. Therefore P(merger∪fire)=P(merger)×P(fire|merger)=0.20×0.80 =0.16=16%
A company's revenue is 1.4 million dollars for the year and 400 thousand dollars in the fourth quarter. The same company's costs are 1.2 million dollars for the year and 350 thousand dollars in the fourth quarter. What is the ratio of revenue to costs for the fourth quarter of the year? What is the proportion of revenue in the fourth quarter to total revenue for the year? (Answers in the following form: Ratio, Proportion) The answers are simplified. a) 8:7, 2:7 b) 8:7, 7:24 c) 7:6, 2:7 d) 7:6, 7:24
A. The ratio of revenue to costs for the fourth quarter of the year is 400 thousand to 350 thousand. This is simplified to 8:7. The proportion of revenue in the fourth quarter to total revenue for the year is 400 thousand to 1.4 million. This is simplified to 2:7.
In a study of cancer treatments, the subjects and the treatment allocator (who is also the data gatherer) are unaware of which treatment is being given to which subject. This is a ____________ study. a) Double-Blind b) Triple-Blind c) Information-biased d) Response-biased
A. There are two layers being blinded in this study. If the treatment allocator and the data gatherer were different people, then this would be a triple-blind study. There is no stated bias.
George is studying the change in production of radios in the entire country over the past ten years. There were three companies that produced radios ten years ago, and now there are four companies that produce radios. If George is able to get each company's production data, he can take a ________________ to determine the change in national radio production. a) Simple Composite Index b) Weighted Composite Index c) Simple Index Number d) Weighted Index Number
A. There is information from many companies, but it is all radio production. This means that there is no reason to weigh one company's production more heavily than another company's production.
There is a 50 percent chance that the president will slip on a banana peel. Also, there is a 25 percent chance that the president will be hit in the face with an apple. There is a 10 percent chance that the president will slip on a banana peel and get hit in the face with an apple. What is the likelihood that the president has a run-in with at least one of these fruits? a) 65% b) 85% c) 35% d) 22.50%
A. This is a union between P(banana) and P(apple). Therefore, P(banana ∪ apple) =P(banana)+P(apple)−P(banana∩apple) =0.50+0.25−0.10=0.65=65%. The president will probably not have a great week.
The manager of an assembly plant is conducting a study examining the cost of screws. If the simple index number for screws is 400, with a base period starting one year earlier, what conclusion should an employer make? a) The rising cost of screws should be studied. b) The increased productivity should be celebrated. c) The decrease in screw price should be studied. d) The decrease in productivity needs to be addressed.
A. This is a very large increase in the cost of screws. The cause for the rise in cost is not apparent, here.
How do you determine the early finish date for an activity in a network diagram?
Add the duration of the activity to the early start date. The early finish date for an activity is equal to its early start date plus the amount of time needed to complete the activity.
Who is most likely to use a company's KPI performance dashboard? a) customers b) management c) new hires d) financial advisors
B. A KPI performance dashboard is a way to display KPIs using a series of visual representations such as charts and graphs. It is most likely used by company management to review company performance in various indicators.
Which of the following sentences is NOT true about the True Score Model? a) An observed score is the score that is actually achieved on a test. b) A true score is the best possible score an individual might achieve on a test. c) Random Measurement Error should disappear as the number of tests increases. d) Systematic Measurement Error means that there is a problem within the experiment itself.
B. A true score is not the best possible score an individual might achieve on a test, but it's the average score an individual would achieve if the test were taken infinite times.
There are five steps to the process of results-based management. Which of the following is NOT one of the three steps in the RESULTS part of results-based management? a) Impact b) Activities c) Outputs d) Outcomes
B. Activities are a step in the process of results-based management, but are a part of the resources used, along with inputs. Outputs, outcomes, and impact are the three steps of results in results-based management.
Which one of the following is NOT an example of big data? a) Department store questionnaires for online shoppers b) The number of people in the entire world c) Different heights of people in the state of Alabama d) Spending habits of people from Beverly Hills
B. Although the number of people in the world is a large number, it is only one number (data point). All of the other answers contain many data points.
Which one of the following is a disadvantage of balanced scorecards? a) They do not improve organization alignment. b) They do not involve a relatively easy process to develop a meaningful scorecard. c) They fail to link a company's operations with its strategy. d) They do not improve communication within an organization.
B. Answers A and C are advantages, and answer D is not true. Balanced scorecards do not involve a relatively easy process to develop a meaningful scorecard.
What is a disadvantage of a using net promoter score in an organization? a) A net promoter score requires sophisticated calculations in its determination. b) A net promoter score system does not determine the area of dissatisfaction. c) A net promoter scores does not quantify customer loyalty. d) The net promoter score system does not allow companies to benchmark against industry leaders
B. Answers C and D are not true and answer A is an advantage. A net promoter score does not determine the area of customer dissatisfaction.
Which of the following could be an appropriate key performance indicator (KPI)? a) Mission of new CEO b) Average quarterly sales c) Company structure d) Types of strategies used
B. Average quarterly sales are quantifiable while the other three answers are not.
Which of the following is NOT one of the four main perspectives examined by the balanced scorecard? a) Innovation and Growth b) Branding c) Financials d) Internal Business Processes
B. Branding is not one of the four main perspectives examined by the balanced scorecard. Although allocation of resources is an important performance measure, the four broad categories used in a balanced scorecard system are customers, innovation and learning, financials, and internal business processes.
Hector has asked his team to collect data to show when and where defects occur. Now he is having problems compiling the information because the people on his team all decided to collect the data in different ways. What tool should Hector have asked his team to use to make this process easier to manage? a) a Pareto chart b) a check sheet c) a histogram d) a process decision program chart
B. Check sheets would have provided a structured and standardized way for Hector's team to collect and present data.
Cluster analysis sorts data points into ___________ and is often used in studying market ____________. a) "natural" groups, company earnings. b) "natural" groups, demographics. c) linear relationships, company earnings. d) linear relationships, demographics.
B. Cluster analysis sorts data points into "natural" groups. Often, especially in marketing, cluster analysis is used to study the behavior of people in different demographics. It is used to maximize a company's earnings, but this is rarely studied using cluster analysis.
What is a use of an index number? a) To find books in the library b) To assess the quantity or price of a good over time c) To compare the price of two goods at a given moment d) To compare other numbers to a certain number on a number line
B. Index numbers are used to follow the changes in prices and quantities of goods and services over time.
Which one of the following is NOT a fundamental element of, and essential to, epidemiology? a) Proportion b) Index Number c) Rate d) Ratio
B. Index numbers might be used in epidemiology, but they are not a fundamental element. Index numbers are actually a type of rate measuring how something has changed over time.
The first stage of Davenport and Kim's Three-Stage Model of quantitative decision making is to a) communicate the results. b) frame the problem. c) solve the problem. d) None of the above.
B. It is important to frame the problem by understanding the environment of a problem. After that, one can solve the problem and communicate the results to others.
According to McKinsey & Company, which one of the following is NOT an area of performance measurement that needs to be focused on in nonprofit management? a) The employee effectiveness b) The ability to raise awareness c) The progress on its goals d) The success of mobilizing its resource
B. It's important for nonprofits to find a way to measure its success of mobilizing its resources, its employee effectiveness, and its progress on its goals. The ability to raise awareness could be a smaller piece of progress on its goals or employee effectiveness, but it's too specific an area to be one of the three big areas for a nonprofit to focus on.
A Net Promoter Score seeks to quantify which of the following? a) Internal staff morale b) Strength of customer relations c) Family and friends discount usage d) Internet promotions of goods and services
B. Net Promoter Score seeks to quantify the strength of customer relations.
Adam is measuring the temperature as the lake outside his office is freezing over. He measures the temperatures in Fahrenheit ten times with the same thermometer and gets the following results: 20, 21, 21, 20, 20, 19, 19, 21, 20, 19. Is his thermometer reliable? Is it valid? a) Reliable and Valid b) Reliable but not Valid c) Not Reliable but Valid d) Not Reliable or Valid
B. The thermometer consistently gives about the same number for the freezing point and therefore is reliable. It is not valid because it does not accurately measure what it is trying to measure. We know this because we know water freezes at 32 degrees Fahrenheit.
A company predicts a 4 percent gain in customer visits. There is an actual gain of 6 percent in customer satisfaction. What is the variance? a) -2 percent b) 2 percent c) 10 percent d) 24 percent
B. The variance is the actual performance minus the target performance.
Which one of the following is not an example of big data? a) Test scores across a university b) Company total sales in the last quarter c) User satisfaction surveys d) Prices of a city's houses
B. This could be a very large number, but it is still just one number. The other answers imply a set of numbers that can be studied as a group.
The goals a company must reach in order to consider itself successful are called? a) critical goal scores b) critical success factors c) SMART goals d) succession factor
B. Those factors critical to an organization reaching its goals are called critical success factors, and they could include such measures as quality, customer service, and efficiency.
Robert would love his investment to yield returns of greater than 40 percent within a year, but he knows it likely won't. Similar investments have averaged 12 percent yield returns per year with a standard deviation of 14 percent. What is the likelihood that Robert's investment will NOT yield greater than a 40 percent return on top of the investment? a) 68.3 percent b) 95.4 percent c) 97.7 percent d) 99.7 percent
C. A 40 percent gain is at two standard deviations above the mean. As we know, only 4.6 percent of the population is outside of two standard deviations from the mean. Out of that 4.6 percent, half is in the tail that is two standard deviations below the mean, and half is in the tail that is two standard deviations above the mean. Therefore, there is only a 2.3 percent chance that the investment has above 40 percent returns and a 97.7 percent chance it does not.
Which of the following is an advantage of key performance indicators (KPIs)? a) They are easily adjustable after being initially setup b) They accurately measure emotional indicators c) They can serve as an internal benchmarking system for the company d) They are expensive and time-consuming to create
C. Answer D is not an advantage and answers A and B are not true because KPIs are not easy to adjust after being set up and they have difficulty measuring emotional indicators.
Company Y predicts 85 sales per day for the week and actually gets 80 sales per day for the week. Company Z predicts an 8 percent decrease in total sales and gets an actual decrease of 7 percent in total sales. Is the variance for company Y favorable or unfavorable? Is the variance for company Z favorable or unfavorable? a) Favorable, Favorable b) Favorable, Unfavorable c) Unfavorable, Favorable d) Unfavorable, Unfavorable
C. Company Y gets fewer sales than expected, but company Z did not decrease their sales as much as it thought it would.
The purpose of data mining is to: a) determine the direction an individual or company takes. b) discover outliers in the data. c) decipher patterns from large databases. d) establish large data as a useful tool.
C. Data mining is used to find the patterns throughout large databases. The patterns discovered in data mining might affect the decisions an individual or company takes, but data mining does not actually make the decisions. It is also not used to determine the outliers unless that is the pattern being studied. Data mining's purpose is not to establish large data as a useful tool, but, rather, it is a useful tool to determine patterns.
For a balanced scorecard, about how many performance measures should be included? a) All of the available performance measures b) One from each major category of the business c) A number limited to the most crucial measures d) 10
C. It is important to only have the most crucial measures on the balanced scorecard so that the important details do not get clouded by the less important measures.
Tom Brady is on the street in Chicago. He is asking anyone he meets if they prefer Tom Brady or Peyton Manning. The survey results show that people greatly prefer Tom Brady. What is the flaw in this experiment? a) Small Sample Size b) Truly Representative Sample c) Response Bias d) Conscious Bias
C. It is response bias, as the respondents might be responding believing that Tom Brady wants to hear that they prefer him over Peyton Manning. This is not Conscious bias as conscious bias would be in the way Tom Brady is asking a question and this scenario does not indicate any bias in that way.
Which of the following could NOT be an appropriate key performance indicator (KPI)? a) Fatality rate in pregnant woman b) Average time spent in stores c) New company goals d) Employees' amount of sleep
C. New company goals are not quantifiable while the other three answers are.
Sarah is working for a non-profit trying to get malaria vaccines to the small village she is helping in Liberia. There has been a spread of malaria, and there are only two ways to get the needed hepatitis vaccines to the village in time. She could mail the shipment and pay extra to get each vaccination through customs or she could take it herself and be with it when going through customs which cost less. To ship it, the cost would be $200 shipping and $2 per vaccination at customs. For taking it herself, the cost would be $1400 and $0.50 per vaccination at customs. If there are 900 people in the village, should Sarah ship the vaccines or take them to Liberia herself? What is the difference in cost between shipping the vaccine and Sarah flying with it? a) Ship vaccines, $150 b) Ship vaccines, $300 c) Fly with vaccines, $150 d) Fly with vaccines, $300
C. The cost of shipping 900 vaccines would be $2000 (cost=$2×900+$200), while the cost of Sarah flying with 900 vaccines would be $1850 (cost=$0.50×900+$1400). The difference is $150 ($2000−$1850).
A manager is looking at his previous quarter and determining the causes for the sudden sales spike to gain a better understanding of the actions and outcomes. If using analytics, which kind of analytics would the manager use? a) Predictive Analytics b) Prescriptive Analytics c) Descriptive Analytics d) Proactive Analytics
C. The manager should use descriptive analytics because it is used to describe the characteristics of what is being studied. In this situation, the previous quarter sales would be studied.
In results-based management (RBM), which of the following is the definition of Outcome? a The long-term effect that the output will have on the organization b The products created by the RBM activities c The short-term effect that the outputs will have on the organization d The resources, human or financial, used within the RBM system
C. The outcome is the short-term effect that the outputs will have on the organization.
A company predicts 300 people to make purchases this year on Black Friday. The total number is actually 282. What is the variance? And is it favorable or unfavorable? a) 6, unfavorable b) 18, favorable c) 18, unfavorable d) 582, favorable
C. The variance is the actual performance minus the target performance. In this case, the actual total was lower than the target, so the variance is unfavorable.
Devin is hoping that his law firm will have one of the highest ratings in the country. He learns that the average score is 80 and his team's score is 86. He is initially disappointed as he had hoped for greater separation between the average and his company's score. He then learns that the standard deviation for the evaluation was 2.5. What is his company's z-score? a) 3.5 b) 82.5 c) 2.4 d) 15
C. The z-score, or standard score, is the difference between the individual's score and the average divided by the standard deviation. In this situation, it would be (86−80)/2.5=2.4. Therefore, the standard score is 2.4.
Harry is doing a survey of the city of Los Angeles' population. He is wondering everyone's favorite food. He sends out a survey to all of the renters in the city and receives basically all of the surveys back in the mail. What is the flaw in this experiment? a) Small Sample Size b) Blinding c) Truly Representative Sample d) Association vs. Causation
C. This does not represent the entire population that Harry is concluding about as he did not get responses from the other samples such as homeowners in Los Angeles.
Which one of the following is criterion-referenced test? a) A history test where the professor "curves" the test, making sure the average for the entire class is at least 75. b) The horses competing at the Kentucky Derby where the winner gets crowned in the winner's circle with a garland of roses c) Medical students needing to effectively give an appendectomy on a mannequin before passing their appendicitis course. d) The Mensa society is only open to those that score in the top two percent on the IQ test (a standardized test)
C. This is the only test where the results are not based on how others do. All three other tests are norm-referenced tests.
Which of the following would be most helpful in completing quality assurance activities? a) inspecting all of the computer monitors produced on one shift b) repairing defects to power sources before they are shipped c) training line workers to institute new testing standards d) rewriting code for faulty software
C. Training is a quality assurance activity because it helps to improve processes and prevent defects from occurring.
Data mining is not useful in: a) sorting through a large amount of data. b) extracting information from a data set. c) deciphering patterns from large databases. d) determining the underlying causes of trends
D. Data mining is not useful in determining the underlying causes of trends.
Which of the following is NOT one of the four main perspectives examined by the balanced scorecard? a) Innovation and Growth b) Customers c) Financials d) New ideas
D. New ideas are not one of the four main perspectives examined by the balanced scorecard. Although new ideas are an important performance measure, the other three answers and Internal Business Process are the four broad categories that a business has to monitor. New Ideas would fit into Innovation and Growth.
Performance measures are used to _______ the efficiency of an individual or group by using _________ and analytics. a) quantify, regression analysis b) quantify, data collection c) evaluate, regression analysis d) evaluate, data collection
D. Performance measures are used to evaluate the efficiency of an individual or group by using data collection and analytics. Quantify is too specific a word while regression analysis is already part of analytics and therefore would be redundant.
Which of the following answers is a step in Quality Control, not Quality Assurance? a) Training b) Assess capability and recommend preventive action c) Understanding the system and predicting outcomes d) Inspection and repair
D. Quality Assurance focuses on preventing defects from occurring while Quality Control is presented with defects and then fixes them.
f Katy's test score was in the 25th percentile for a class of 20 students, how many students scored below Katy? a) 15 b) 10 c) 4 d) 5
D. Scoring in the 25th percentile means that a quarter of the class did worse than Katy. Therefore, five students scored below Katy.
A company has a survey process for determining its net promoter score. 50 people responded to the survey with an answer between 6 and 10? How does NPS classify this group? a) They are the detractors b) They are the promoters. c) They are the passives. d) This is not a defined group.
D. Survey respondents who answer between 0 and 6 are detractors. Survey respondents who answer either 7 or 8 are passives. Survey respondents who answer either 9 or 10 are promoters.
Amanda is measuring the temperature. She looks at the thermometer and sees that it is somewhere between 65 and 66 degrees Fahrenheit. She is okay with the temperature in between two integers because she knows temperature is not ________ data, but temperature is _________ data. a Nominal, Ordinal b Nominal, Discrete c Continuous, Discrete d Discrete, Continuous
D. Temperature is not a measure that comes in increments (discrete) but is continuous as a temperature can be any number within a range.
The Consumer Price Index (CPI) is an example of a ________. a) Simple Index Number b) Simple Composite Index c) Weighted Index Number d) Weighted Composite Index
D. The CPI is a measure that examines the weighted average of prices of common consumer goods and services.
Toby is trying to determine the number of people at today's parade in order to determine the impact of advertising at parades. He asks a number of different people leaving the parade their projected number of attendants. He gets the following responses: 70,000; 450,000; 2,000; 130,000; 3,000,000; 75,000; 200,000; 800,000; 150,000; and 210,000. Is this survey reliable? Is it valid? a) Reliable and Valid b) Reliable but not Valid c) Not Reliable but Valid d) Not Reliable or Valid
D. The answers are not consistent and do not accurately measure the number of people. Therefore it is not reliable or valid.
The following is a list of prices for a barrel of oil over time:20 dollars in 199015 dollars in 199527 dollars in 200050 dollars in 200575 dollars in 2010What is the simple index number for the price of oil in 2005? Hint: the base period is 1990. a) 70 b) 2.5 c) 375 d) 250
D. The base period is 1990 when a barrel of oil cost 20 dollars. In 2005, a barrel of oil cost 50 dollars. The simple index number is 5020×100=250.
When determining the reliability of a test, the same test is given to the sample on two different occasions. What type of reliability test is this? a) Split-Half Method b) Cronbach's Alpha c) Parallel-Froms Method d) Test-Retest Method
D. The test-retest method is when the same test is given to the sample on two different occasions.
A balanced scorecard usually has a list of objectives. In each objective, a variance is shown. What is the meaning of variance when used on a balanced scorecard? a) The difference between the values compared to the previous time the values were determined b) The average of the sum of the differences between the results and the mean c) The average of the sum of the differences between the results and the median d) The difference between the target performance and the real performance
D. The variance when listed on a balanced scorecard, is the difference between the target performance and the actual performance.
Governments often apply cost-benefit analysis when making decisions. They usually try to take into account many variables. John is a member of the state senate. What is a variable John should NOT consider when determining whether or not the state should build the bridge. a) The environmental impact of construction b) The decrease in spending at businesses near other bridges c) The cost of the construction of the bridge d) The number of times John will use the bridge
D. There are many things that should be considered in cost-benefit analysis of whether or not to build a bridge. Personal motivations should not be included in cost-benefit analysis on a public scale.
California is about 160,000 square miles. Maine is about 35,000 square miles. If California had one and a half times as many trees as Maine, then: a) trees have a higher incidence rate in California. b) trees have a higher incidence rate in Maine. c) trees are more prevalent in California. d) trees are more prevalent in Maine
D. Trees are more prevalent in Maine as California. California is more than four times the size of Maine and, in this example, only has one and a half as many trees as Maine. Therefore, you're more likely to bump into a tree in Maine than California. Incidence rates are unknown as there is no mention of time.
Kai's team is running an experiment to see if their ideas will work before they implement them company-wide. What step of the PDCA cycle are they in?
Do. In the Do step, teams run experiments to see if plans will work on a small scale before implementing them on a larger scale.
True or False? A SIPOC diagram provides a detail-level view of specific processes.
False Correct! A SIPOC diagram helps you define the boundaries of your operations by providing a high-level view of the process, from supplier to customer.
True or False?A strong correlation always explains a cause-and-effect relationship between two variables
False Correct! A correlation does not prove that one variable causes another—it is possible that both of the variables in question are affected by some other factor, or that one variable is a subset of the other.
True or False? The goal of "lean" processes is to limit the occurence of defects
False Correct! This is a false statement. The goal of "lean" processes is to eliminate anything that does not add value to the customer
Why is it helpful for an organization to use a process approach in managing its quality activities?
It helps to create consistent, predictable outcomes. By analyzing and improving the processes in its quality management system, an organization ensures that its outcomes are consistent and predictable.
A SIPOC diagram helps you manage quality in which of the following ways?
It helps you understand how process elements fit together. A SIPOC diagram ensures that you take a broad view of work instead of focusing only on internal work. It also considers the quality of the work and materials that suppliers provide. Finally, a SIPOC looks at how the outputs of the process are perceived and used by customers.
________ is a continuous improvement concept in which many small increments add up over time to create substantial breakthroughs
Kaizen Correct. Kaizen is comprised of many small, incremental activities that add up over time to create substantial improvements.
What does KPI stand for?
Key Performance Indicator. The correct answer is A. KPI stands for Key Performance Indicators and are used by organizations to quantify the degree of success in the area being measured
SIPOC stands for ________.
Supplier, Input, Process, Output, Customer SIPOC is an acronym that stands for Supplier-Input-Process-Output-Customer. A SIPOC diagram helps you to see all of the elements that could affect your process, including the supplier who provides the material you'll use in the process and the end user or customer who will use the output.
Define, Measure, Analyze, Improve, Control
The "DMAIC" of DMAIC Framework stand for define, measure, analyze, improve, and control.
True or False?A scatter diagram shows the potential correlations and relationships between two variables.
True Correct! A scatter diagram shows the potential correlation or relationship between a suspected "cause" and an expected "effect."
True or False? Quality control focuses on uncovering defects, while quality assurance focuses on improving processes to prevent defects.
True Correct! Quality control helps you uncover defects and take action to correct them; quality assurance helps you improve processes to prevent defects from occurring.
True or False? Statistical Process Control ensures that quality is built into processes, instead of added on to the end of processes.
True Correct! Statistical process control methods reduce the need to correct defects by ensuring that quality is built into the process instead of added on to the end of the process. By including control measures into production processes, SPC guards against mistakes being incorporated into products.
True or False? If a system only works if every single piece in the system works, then this is a system in series
True Correct! This is a true statement. A system in series is one where every single piece of the system is necessary for the overall functionality of the system
True or False? ISO Certification acknowledges that a company is dedicated to quality concepts and is continually working toward producing at the highest quality
True Correct! This is a true statement. ISO Certification is to show that a quality management system is in place to monitor and control quality issues and customer and stakeholder needs
True or False? An index number is used to measure the change in quantity or price of a good or service over time.
True Correct. Index numbers are often used when measuring inflation of certain items, certain prices, or quantities and prices for societies as a whole
True or False? A flowchart is a graphic representation of the steps that make up a process
True Correct. This is a true statement. A flowchart is a diagram that uses symbols and arrows to show the sequence of steps in a process.
True or False? Return of sales, referrals, and average tenure of employees are examples of business performance measures
True Correct. This is a true statement. Number of months of continuous operation compared to competitors, referrals, return on sales, and average tenure of employees are all business performance measures
True or False? The greatest difference in test scores for an entire class is when each observed question has a fifty percent chance of being correct.
True Correct. This statement is true. A class's distribution of test scores will be greatest when each question on the test has a fifty percent chance of being correct.
True or False? If a company wants to determine its strategy it must understand itself and its competitors from extensive data collection and analysis.
True Correct. This statement is true. A company must know how the company compares to other companies in its industry. This comes from a large amount of data collection and analysis.
True or False? A simple composite index is often used to measure one good or service from many different sources.
True Correct. This statement is true. A simple composite index puts just as much weight on one piece of data as any other piece of data. Therefore, a simple composite index is often used to measure the same good or service across an industry
What is the 80/20 rule?
a principle that suggests that 80% of quality problems are the result of 20% of causes Correct! The 80/20 rule states that a minority of causes (about 20%) are behind the majority (around 80%) of problems.
In a flowchart, a diamond shape indicates the point in the process where ________.
a question must be answered Correct! Diamonds indicate points where a question needs to be answered or a decision must be made. These questions result in a "yes" or "no" answer, which leads to a subsequent step in the process.
What is quality management?
an approach to uncover customer needs and expectations and to adjust work to meet those needs to the highest extent possible. Quality management helps to uncover expectations and to take action to ensure that completed outputs meet those needs. It involves taking action to correct defects and to prevent them from happening in the first place.
Which of the following would contain the most waste? a. an ideal state map b. a current state map c. a future state map d. None of the above—they would all contain the same amount of waste.
b. a current state map Correct! Because it shows a value stream before improvements have been considered, a current state map would most likely contain the most waste.
A Pareto chart is a type of ________
bar chart. A bar chart is a type of histogram that teams use to help prioritize the causes of quality problems
Which of the following statements is false? a. In a Lean system, quality is improved so less rework is needed. b. Less space is needed on the production floors and in the warehouses of Lean systems to house inventory. c. In an effective lean system, problems are quickly identified at their source and resolved as soon as possible. d. Information management in Lean systems becomes more complex because more suppliers and partners are included in the value stream.
d. Information management in Lean systems becomes more complex because more suppliers and partners are included in the value stream. Correct! In Lean systems, information management actually becomes simpler to control and coordinate because the entire value stream is continuously evaluated and optimized.
A collaborative relationship with suppliers often results in ________.
decreased costs Correct! A collaborative relationship often results in a sharing of expertise that may help decrease costs for everyone involved.
A Pareto chart prioritizes categories with the most important category on the chart's ________.
left side Correct! The bars on the Pareto chart are arranged in descending order, with the most important category or highest priority on the chart's far-left side, making it easy to see which factors should be addressed first.
Statistical process control relies on _________ to analyze results.
metrics. Statistical process control relies on measurements or metrics to illustrate results and to analyze the root cause of any deviations from plans.
Quality management uses measurements and statistics to quantify information and evaluate results ________
objectively Correct! Quality management practices rely on measurements and statistics to look at processes objectively. This provides a reliable way to measure improvements and gauge progress.
What is the main function of a check sheet?
to collect and tabulate data Correct! A check sheet is a structured form that helps practitioners collect and tabulate data.
What is the PDCA cycle used for?
to gather information and test options on a small scale before implementing changes on a large scale.The Plan-Do-Check-Act (PDCA) cycle lets teams run experiments and test hypotheses on a small scale before they are executed on a larger scale.