Exam 19: Balanced Scorecard: Quality and Time

An example of a nonfinancial measure for customer satisfaction is ________.

External failure costs are costs incurred on defective products after they have been shipped to customers.

An illustration that resembles the bone structure of a fish and identifies potential reasons why a problem exists is called ________.

Total costs of quality help managers aggregate costs to evaluate the tradeoffs of incurring prevention costs and appraisal costs to eliminate internal and external failure costs.

Longer manufacturing cycle times can result in ________.

The manufacturing cycle including related delays can be reduced by ________.

Northern Corp is concerned about its declining sales, especially the reduction in the number of customers. For the last two years, its shirts have won industry awards for high quality and trend-setting styles. At the latest executive managers' meeting, all were blaming each other for the decline. After much discussion and presenting some fact-finding information, it was determined that sales relationships were the cause of most of the problems. Required: What may be some of the causes and how can the causes be detected if product quality is not an issue?

Which of the following is a financial measure of quality?

The time from which a machine setup begins for an order until the product is delivered to the customer is the ________.

Dulcet Foods, Inc., has the option to sell either of the variant. Which one is a better alternative?

Identifying and minimizing the sources of non-value-added manufacturing time increases a firm's responsiveness to its customers and reduces its costs.

Manufacturing cycle times affect both revenues and costs.

Premier Corp expects to spend $800,500 in 2017 in appraisal costs if it does not change its incoming materials inspection method. If it decides to implement a new receiving method, it will save $60,100 in fixed appraisal costs and variable costs of $0.50 per materials units received. The new method involves $140,600 in training costs and an additional $150,000 in annual equipment rental. Internal failure costs average $160 per failed unit of finished goods. During 2016, 4% of all completed items had to be reworked. External failure costs average $430 per failed unit. The company's average external failures are 1% of units sold. The company carries no ending inventories, because all jobs are on a per order basis and a just-in-time inventory ordering method is used. What is the net effect on appraisal costs for 2017, assuming the new receiving method is implemented and that 800,500 material units are received?

Which of the following correctly describes customer-response time?

Customer response time is the time it takes from the time a customer places an order for a product or service to the time the product or service is delivered to the customer.

When using a control chart, the observations outside the upper and lower control limits are ordinarily regarded as nonrandom and worth investigating.

COQ measures such as measures of customer satisfaction and employee satisfaction are useful indicators of long-run performance.

Tony placed an order for a customized watch. The customer response time is 43 hours, its receipt time is 9 hours, and manufacturing cycle time is 25 hours. Calculate the delivery time of the product.

One of the ways to increase capacity is to invest in new equipment, such as flexible manufacturing systems that can be programmed to switch quickly from producing one product to producing another.

The amount of time from when a customer places an order for a product to when the product or service is delivered to the customer is referred to as ________.