The four categories of cost associated with product quality costs are:
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1 .Which one of the following statements about supply and demand is true?
A If demand increases and supply increases, equilibrium quantity will fall. B If demand increases and supply remains constant, equilibrium price will fall. C If demand increases and supply decreases, equilibrium price will increase. D If supply increases and demand remains constant, equilibrium pric...
2 .The impact of a government price support program would most likely result in which of the following?
A Improve the rationing function of prices. B Lead to surpluses. C Lead to shortages. D Not influence the rationing function of prices.
3 .In microeconomics, the distinguishing characteristic of the long run on the supply side is that:
A Firms are not allowed to enter or exit the industry. B Only supply factors determine price and output. C All inputs are variable. D Only demand factors determine price and output.
4 .The demand curve for a product reflects which of the following?
A The impact that price has on the amount of a product purchased. B The impact that price has on the purchase amount of two related products. C The willingness of producers to offer a product at alternative prices. D The impact of prices on the amount of product offered.
5 .Companies that adopt just-in-time purchasing systems often experience:
A Fewer deliveries from suppliers. B A greater need for inspection of goods as the goods arrive. C Less need for linkage with a vendor's computerized order entry system. D A reduction in the number of suppliers.
7 .Which of the following is not an external failure cost?
A Liability claims. B Warranty costs. C Tooling changes. D Lost customers.
8 .Unlike business process reengineering, business process management:
A Has a longer implementation time. B Seeks incremental change. C Increases the financial risk associated with change. D Seeks radical change.
9 .As part of a benchmarking process, acompany's costs of quality for the current month have been identified asfollows: Employee training USD 20,000 Product recalls 8,000 Scrap 4,500 Quality inspectors 48,000 Preventive maintenance 19,500 Supplier education expense 17,500 Materials inspection expense 60,000 Processing product returns 2,500 What amount is the company's prevention cost for the current month?
A USD 165,000 B USD 57,000 C USD 39,500 D USD 175,500
10 .A company is conducting a risk analysis on a project. One task has a risk probability estimated to be 0.15. The task has a budget of USD 35,000. If the risk occurs, it will cost USD 6,000 to correct the problem caused by the risk event. What is the expected monetary value of the risk event?
A USD 5,250 B USD 6,150 C USD 4,350 D USD 900
