OP Test 3 T/F
A fishbone diagram identifies which category is most frequently observed out of all the categories for which you have data.
False
A histogram is a summarization of data measured on a yes-or-no basis.
False
A process that exhibits random variability would be judged to be out of control.
False
A quality circle is a management team focused on implementing major changes to improve quality.
False
A retail store that carries twice as much inventory as its competitor will provide twice the customer service level.
False
Firms that wish to do business with the European Community can benefit from having a quality management system that meets ISO 9000 standards.
True
High-cost, low-volume items often require careful inspection since we may have large costs associated with passing defectives.
True
ISO 9000 standards stress continual improvement regardless of how good you currently are.
True
If a point on a control chart falls outside one of the control limits, this suggests that the process output is nonrandom and should be investigated.
True
Interest, insurance, and opportunity costs are all associated with holding costs.
True
Medical malpractice claims are an example of how poor quality can affect an organization through liability.
True
Monitoring inventory turns over time can be used as a measure of performance
True
One important use of inventories in manufacturing is to decouple operations through the use of work-in-process inventories.
True
Patterns of data on a control chart suggest that the process may have nonrandom variation.
True
Process capability compares process variability to the tolerances.
True
Profit margins tend to be inversely related to inventory turns.
True
Quality of conformance refers to the degree to which goods and services conform to the intent of the designers as documented in the specifications.
True
Quality of design refers to the intention of the designers to include or exclude certain features in a product or service based on marketing and other information.
True
Reducing the variability in our product or service is an important key to quality.
True
Run tests are useful in helping to identify nonrandom variations in a process.
True
Serviceability, conformance, and reliability are dimensions of product quality.
True
Six Sigma programs have both management and technical components.
True
Solving quality problems can lead to lower inventory levels.
True
TQM expands the traditional view of quality beyond looking only at the quality of the final product or service to looking at the quality of every aspect of the process.
True
The EOQ should be regarded as an approximate quantity rather than an exact quantity. Thus, rounding the calculated value is acceptable.
True
The PDSA cycle forms the conceptual basis for continuous improvement.
True
The amount of inspection we choose can range from no inspection at all to inspecting each item numerous times.
True
The average inventory level and the number of orders per year are inversely related: As one increases, the other decreases.
True
The basic EOQ model ignores the purchasing cost.
True
The degree to which a product or service satisfies its intended purpose is determined by service after delivery, ease of use, design, and conformance to design.
True
The inventory value of the supply chain exceeds the inventory value of the organization's work-in-process inventory.
True
The output of a process may not conform to specifications even though the process may be statistically "in control."
True
The overall objective of inventory management is to achieve satisfactory levels of customer service while keeping inventory costs reasonable.
True
The primary difference between internal failures and external failures is time and place of discovery of the failure.
True
The purpose of benchmarking is to establish a standard against which the organization's performance can be judged and to identify a model for possible improvement.
True
The sampling distribution can be assumed to be approximately normal even when the underlying process distribution is not normally distributed.
True
The total cost curve is relatively flat near the EOQ.
True
The two basic issues in inventory are how much to order and when to order
True
Three key philosophies in TQM are continuous improvement, involvement of everyone in the organization, and customer satisfaction.
True
Attribute data are counted, variable data are measured.
true
Customer expectations tend to change over time, affecting their perception of service quality.
True
Cycle counting can be used in motorcycle inventory control.
True
DVD recorders would be an example of independent-demand items.
True
Quality at the source means returning all defects to the source—our vendors.
False
A c-chart is used to monitor the total number of defectives in the output of a process.
False
A control chart is a visual representation of the steps in a process.
False
An R value of zero (on a range chart) means that the process must be in control since all sample values are equal.
False
An example of inventory holding cost is the cost of moving goods to temporary storage after receipt from a supplier.
False
An inventory buffer adds value and lowers cost in all supply chains.
False
An organization achieves quality by consistently meeting its competitors' standards.
False
An x-bar control chart can only be valid if the underlying population it measures is a normal distribution.
False
Approving the effort that occurs during the production process is known as acceptance sampling.
False
Because courtesy is subjective, it cannot be considered a factor in service quality.
False
Broadly defined, quality refers to the ability of a product or service to occasionally meet or exceed customer expectations.
False
Continuous improvement focuses on achieving major breakthroughs in product or service quality.
False
Control limits are based on multiples of the process standard deviation.
False
Control limits used on process control charts are specifications established by design or customers.
False
Cpk can be used only when the process is centered.
False
Decoupling operations means to break the linkage between two sequential operations.
False
Discrete stocking levels are used when an organization does not want visibility of inventory levels.
False
EOQ inventory models are basically concerned with the timing of orders.
False
High performance and low prices are both considered to be dimensions of quality.
False
In the A-B-C approach, C items typically represent about 15 percent of the number of items, but 60 percent of the dollar usage.
False
In the EOQ formula, holding costs under 10 percent are expressed as percentages, above 10 percent are expressed as annual unit costs.
False
It is critical that the exact quantity calculated in the EOQ model be ordered.
False
Larger samples will require wider x-bar control limits because there is more data.
False
Modern quality management emphasizes finding and correcting mistakes before they reach the customer—catching the errors before they are shipped.
False
Processes that are in control eliminate variations.
False
Range charts and p-charts are both used for variable data.
False
Regardless of superior quality, consumers will not pay premium prices.
False
Run tests give managers an alternative to control charts; they are quicker and cost less.
False
Statistical process control focuses on the acceptability of process output.
False
Statistical process control is the measurement of rejects in the final product.
False
Suppliers are not included in quality assurance and quality improvement efforts in TQM; they should worry about their own problems.
False
The A-B-C approach involves classifying inventory items based on their name.
False
The average inventory level is inversely related to order size.
False
The best way to assure quality is to use extensive inspection and control charts.
False
The dimensions of quality are important for products but are not applicable in service organizations.
False
The number of defective parts in a sample is an example of variable data because it will "vary" from one sample to another.
False
The objective of inventory management is to minimize the cost of holding inventory.
False
The primary purpose of statistical process control is to detect a defective product before it is shipped to a customer.
False
Tolerances represent the control limits we use on the charts.
False
Understocking an inventory item is a sure sign of inadequate inventory control.
False
Cost of inspectors, testing, test equipment, and labs are examples of appraisal costs.
True
Crosby's concept of "quality is free" means that it is less expensive to do it right initially than to do it over.
True
A c-chart is used to monitor the number of defects per unit for process output.
True
A great job of flowcharting and benchmarking a process is of only academic interest if the proposed changes are not implemented.
True
A lower control limit must by definition be a value less than an upper control limit.
True
A p-chart is used to monitor the fraction of defectives in the output of a process.
True
A run test checks a sequence of observations for randomness.
True
A scatter diagram is a graphical technique that shows whether two variables may be related.
True
A service blueprint is a flowchart of a service process that shows which of its steps has high customer contact.
True
According to Deming, it is the systems that management puts into place that are primarily responsible for poor quality, not employees.
True
Annual ordering cost is inversely related to order size.
True
Business organizations that achieve good quality benefit in a variety of ways, including a positive reputation for quality, increased customer loyalty, and lower production costs.
True
Carrying cost is a function of order size; the larger the order quantity, the higher the inventory carrying cost.
True
Control limits tend to be wider for more variable processes.
True
Convenience, reliability, and assurance are dimensions of service quality.
True
To provide satisfactory levels of customer service while keeping inventory costs within reasonable bounds, two fundamental decisions must be made about inventory: when to order and how much to order
True
User instructions and follow-up services after delivery are important elements of overall product or service quality.
True
Using the EOQ model, the higher an item's carrying costs, the more frequently it will be ordered
True
When a process is not centered, its capability is measured in a slightly different way. The symbol for this case is Cpk.
True
Concluding that a process is out of control when it is not is known as a Type I error.
true
The amount of inspection needed is governed by the costs of inspection and the expected costs of passing defective items.
true
The customer is the focal point and customer satisfaction is the driving force in quality management.
true
