Total Quality Management Questions and Answers – Cost of Quality – 1

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This set of Total Quality Management Multiple Choice Questions & Answers (MCQs) focuses 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
View Answer

Answer: a
Explanation: 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
View Answer

Answer: a
Explanation: 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
View Answer

Answer: b
Explanation: 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.
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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
View Answer

Answer: a
Explanation: 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
View Answer

Answer: b
Explanation: 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
View Answer

Answer: a
Explanation: 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
View Answer

Answer: d
Explanation: 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.
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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
View Answer

Answer: d
Explanation: 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
View Answer

Answer: d
Explanation: 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.
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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
View Answer

Answer: d
Explanation: 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
View Answer

Answer: d
Explanation: 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
View Answer

Answer: b
Explanation: Quality improvement, Quality education, and Quality performance reporting fall under the category of Prevention Costs. Prevention costs fall under the category of Cost of Good Quality.

13. Retrofit costs fall under the category of _______
a) Appraisal Costs
b) Prevention Costs
c) Internal Failure Costs
d) External Failure Costs
View Answer

Answer: d
Explanation: Retrofit costs fall under the category of External Failure Costs. Retrofit means to add a component or accessory to something that did not have it when it was manufactured. External Failure Costs fall under the category of Cost of Poor Quality.

14. Receiving or incoming inspections and tests fall under the category of ______
a) Purchasing Appraisal Costs
b) Operations Appraisal Costs
c) External Appraisal Costs
d) External Failure Costs
View Answer

Answer: a
Explanation: Receiving or incoming inspections and tests fall under the category of Purchasing Appraisal Costs. Appraisal Costs fall under the category of Cost of Good Quality. Cost of Good Quality and Cost of Poor Quality are the two categories of Cost of Quality.

15. Evaluation of field stock and spare parts fall under the category of ______
a) Purchasing Appraisal Costs
b) Operations Appraisal Costs
c) External Appraisal Costs
d) External Failure Costs
View Answer

Answer: c
Explanation: Evaluation of field stock and spare parts fall under the category of External Appraisal Costs. Special product evaluations and Field performance evaluations also fall under the category of External Appraisal Costs.

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Manish Bhojasia - Founder & CTO at Sanfoundry
Manish Bhojasia, a technology veteran with 20+ years @ Cisco & Wipro, is Founder and CTO at Sanfoundry. He lives in Bangalore, and focuses on development of Linux Kernel, SAN Technologies, Advanced C, Data Structures & Alogrithms. Stay connected with him at LinkedIn.

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