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