Grading Summary
These are the automatically
computed results of your exam.
Grades for essay questions, and
comments from your instructor, are
in the "Details" section below.
Date Taken:
Time Spent:
Points Received:
Question Type:
Multiple Choice
30 / 30 (100%)
# Of Questions:
10
# Correct:
10
Grade Details
1. Question :
Student Answer:
(TCO 11) The four cost categories in a cost of quality program are
product design, process design, internal success, and external
success.
prevention, appraisal, internal failure, and external failure.
design, conformance, control, and process.
Instructor
Explanation:
Points Received:
design, process specification, on-time delivery, and customer
satisfaction.
Chapter 19, Page 667
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Comments:
2. Question :
Student Answer:
(TCO 11) ________ is a formal means of distinguishing between random
and nonrandom variation in an operating process.
Statistical process control (SPC)
A Pareto diagram
A cause-and-effect diagram
Instructor
Explanation:
Points Received:
A fishbone diagram
Chapter 19, Page 670
3 of 3
Comments:
3. Question :
Student Answer:
(TCO 11) Which of the following is NOT one of the steps in managing
bottlenecks under the theory of constraints?
Identify the bottleneck resource by searching for resources with large
quantities of inventory waiting to be worked on.
Increase the efficiency and capacity of the nonbottleneck resources.
Subordinate all nonbottleneck operations to the bottleneck operation.
Increase the efficiency and capacity of the bottleneck operation.
Instructor
Explanation:
Points Received:
Chapter 19, Page 681
3 of 3
Comments:
4. Question :
Student Answer:
(TCO 11) Scrap is an example of
external failure costs.
internal failure costs.
prevention costs.
Instructor
Explanation:
Points Received:
appraisal costs.
Chapter 19, Page 667
3 of 3
Comments:
5. Question :
Student Answer:
(TCO 11) Regal Products has a budget of $900,000 in 20X6 for
prevention costs. If it decides to automate a portion of its prevention
activities, it will save $60,000 in variable costs. The new method will
require $18,000 in training costs and $120,000 in annual equipment
costs. Management is willing to adjust the budget for an amount up to the
cost of the new equipment. The budgeted production level is 150,000
units. Appraisal costs for the year are budgeted at $600,000. The new
prevention procedures will save appraisal costs of $30,000. Internal
failure costs average $15 per failed unit of finished goods. The internal
failure rate is expected to be 3% of all completed items. The proposed
changes will cut the internal failure rate by one-third. Internal failure units
are destroyed. External failure costs average $54 per failed unit. The
company's average external failures average 3% of units sold. The new
proposal will reduce this rate by 50%. Assume all units produced are sold
and there are no ending inventories. How much will appraisal costs
change assuming the new prevention methods reduce material failures by
40% in the appraisal phase?
$60,000 increase
$12,000 decrease
$30,000 decrease
$240,000 decrease
The new prevention procedures will save appraisal costs of $30,000.
Instructor
Explanation:
Points Received:
3 of 3
Comments:
6. Question :
Student Answer:
(TCO 12) Which of the following is NOT a major feature of a just-in-time
production system?
Workers are trained to be multi-skilled.
Emphasis is placed on increasing setup time and manufacturing lead
time.
Production is organized in manufacturing cells.
Instructor
Explanation:
Points Received:
Total quality management is aggressively pursued.
Chapter 20, Page 711
3 of 3
Comments:
7. Question :
Student Answer:
(TCO 12) Quality costs include
prevention costs.
stockout costs.
purchasing costs.
Instructor
Explanation:
Points Received:
ordering costs.
Chapter 19, Page 667
3 of 3
Comments:
8. Question :
Student Answer:
(TCO 12) Which of the following statements about the economic-orderquantity decision model is FALSE?
It assumes ordering costs and carrying costs are relevant.
It assumes stockout costs are irrelevant if no stockouts occur.
It assumes purchasing costs are relevant when the cost per unit
changes due to the quantity ordered.
Instructor
Explanation:
Points Received:
It assumes quality costs are irrelevant if quality is unaffected by the
number of units purchased.
Chapter 20, Pages 700-702
3 of 3
Comments:
9. Question :
Student Answer:
(TCO 12) When using a vendor-managed inventory system to enhance
the features of supply-chain management, a challenging issue is
problems of communication and trust.
the sharing of accurate, timely, and relevant information about sales
forecasts.
potentially incompatible information systems.
Instructor
All of the above
Chapter 20, Page 708
Explanation:
Points Received:
3 of 3
Comments:
10. Question :
Student Answer:
(TCO 12) Liberty Celebrations, Inc., manufactures a line of flags. The
annual demand for its flag display is estimated to be 100,000 units. The
annual cost of carrying one unit in inventory is $1.60, and the cost to
initiate a production run is $40. There are no flag displays on hand but
Liberty had scheduled 60 equal production runs of the display sets for the
coming year, the first of which is to be run immediately. Liberty
Celebrations has 250 business days per year. Assume that sales occur
uniformly throughout the year and that production is instantaneous.
If Liberty Celebrations does not maintain a safety stock, the estimated
total carrying cost for the flag displays for the coming year is
$2,000.
$2,200.
$2,400.
Instructor
Explanation:
Points Received:
Comments:
$3,000.
$40 x 60 = $2,400.
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