Chapter 1.A, Problem 1E

EXERCISE 1A−1 Cost of Quality Terms LO1−7, LO1−8

A number of terms relating to the cost of quality and quality management are listed below:

Appraisal costs 		Quality circles
Quality cost report 	  	Prevention costs 
Quality of conformance  	External failure costs 
Internal failure costs 		Quality costs 

Required:

Choose the term or terms that most appropriately complete the following statements. The terms can be used more than once and a blank ran hold more than one word.

1. A product that has a high rate of defects is said to have a low _______.
2. All of the costs associated with preventing and dealing with defects once they occur are known as _______.
3. In many companies, small groups of employees, known as_______ meet on a regular basis to discuss ways to improve quality.
4. A company incurs_______ and _______in an effort to keep defects from occurring.
5. A company incurs_______ and_______ because defects have occurred.
6. Of the four groups of costs associated with quality of conformance,_______ are generally the most damaging to a company.
7. Inspection, testing, and other costs incurred to keep defective products from being shipped to customers are known as _______.
8. _______ are incurred in an effort to eliminate poor product design, defective manufacturing practices, and the providing of substandard service.
9. The costs relating to defects, rejected products, and downtime caused by quality problems are known as _______.
10. When a product that is defective in some way is delivered to a customer,_______ are incurred.
11. Over time a company’s total quality costs should decrease if it redistributes its quality costs by placing its greatest emphasis on_______ and _______.
12. One way to ensure that management is aware of the costs associated with quality is to summarize such costs on a _______.