Business Quiz: Organization Management
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Questions and Answers
- 1.
A fishbone diagram is an example of which of the following?
- A.
A cost buildup method
- B.
Organization method
- C.
Capability analysis
- D.
Another name for Pareto analysis
Correct Answer
B. Organization methodExplanation
A fishbone diagram is an example of an organization method. It is a visual tool used to identify and analyze the potential causes of a problem or an effect. The diagram resembles the structure of a fish skeleton, with the problem or effect being the head and the potential causes being the branches. This method helps in organizing and categorizing the possible causes, making it easier to understand and address the root cause of the problem.Rate this question:
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- 2.
Which of the following will ensure quality in manufactured parts?
- A.
Applying as much automation as possible
- B.
Inspecting all parts for known defectives
- C.
Improving customer warranty coverage
- D.
Reducing the variation in the process
Correct Answer
D. Reducing the variation in the processExplanation
Reducing the variation in the process will ensure quality in manufactured parts. By minimizing the differences in the manufacturing process, such as controlling the input materials, standardizing the equipment and procedures, and reducing human error, the consistency and reliability of the parts can be improved. This helps to eliminate defects and inconsistencies, resulting in higher quality products.Rate this question:
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- 3.
Which of the following statements is true?
- A.
In the long run, quality is more expensive but necessary for survival in today's business world
- B.
Most companies spend less than 10 percent on quality-related activities
- C.
In the long run, quality is less expensive
- D.
Quality-related costs (failure costs) are an integral part of doing business and should be built into every product cost buildup
Correct Answer
C. In the long run, quality is less expensiveExplanation
In the long run, quality is less expensive. This statement suggests that investing in quality upfront may require higher costs initially, but it ultimately leads to lower costs in the long term. This is because high-quality products are less likely to have defects or require repairs, which can save money on warranty claims and customer complaints. Additionally, focusing on quality can lead to increased customer satisfaction and loyalty, resulting in higher sales and profitability for the business.Rate this question:
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- 4.
Which of the follow statements is true regarding Pareto analysis?
- A.
It separates the significant few from the trivial many
- B.
It uses the six categories of quality
- C.
It is an extension of the 50-50 rule of quality
- D.
It assigns weighted costs associated with internal versus external failure costs
Correct Answer
A. It separates the significant few from the trivial manyExplanation
Pareto analysis is a technique used to separate the significant few from the trivial many. It is based on the Pareto principle, also known as the 80/20 rule, which states that roughly 80% of the effects come from 20% of the causes. In the context of quality management, Pareto analysis helps identify and prioritize the most important issues or factors that contribute to a problem or outcome. By focusing on the significant few, resources can be allocated more efficiently to address the most critical areas and improve overall quality.Rate this question:
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- 5.
Which of the following statements is best regarding building quality inot products?
- A.
It is very difficult to do
- B.
It is most easily accomplished through automation
- C.
It is best accomplished by production workers
- D.
It is the responsibility of the quality inspectors.
Correct Answer
C. It is best accomplished by production workersExplanation
Building quality into products is best accomplished by production workers because they are directly involved in the manufacturing process. They have the knowledge and skills to identify and address potential quality issues during production. By having production workers take responsibility for quality, they can ensure that the products meet the required standards and specifications before they are released to the market. This approach promotes a culture of quality throughout the production process and reduces the need for extensive inspection and rework.Rate this question:
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- 6.
Which of the following is an objective of purchasing?
- A.
To keep many sources of supply available to ensure competitive pricing
- B.
To control budgetary expenditures of all employees through sound purchase order control
- C.
To obtain goods and services of the required specification and quality
- D.
To ensure that goods are always purchased at the lowest price
Correct Answer
C. To obtain goods and services of the required specification and qualityExplanation
The objective of purchasing is to obtain goods and services that meet the required specification and quality. This means that the purchasing department is responsible for sourcing and procuring products and services that meet the specific needs and standards of the organization. This objective ensures that the organization receives the right products and services that are fit for their intended purpose and meet the desired level of quality.Rate this question:
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- 7.
In a purchasing system, which of the following originates with the department or person who will be the ultimate user?
- A.
A purchase requisition
- B.
A purchase order
- C.
Vendor selection
- D.
A request for quotation
Correct Answer
A. A purchase requisitionExplanation
A purchase requisition originates with the department or person who will be the ultimate user. It is a formal request made by the department or person to the purchasing department, indicating the need for certain goods or services. The purchase requisition includes details such as the quantity, description, and specifications of the items required. It serves as the initial step in the purchasing process, informing the purchasing department about the specific needs of the department or person who will use the goods or services. Based on the purchase requisition, the purchasing department can then proceed with initiating the purchasing process by creating a purchase order or requesting quotations from vendors.Rate this question:
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- 8.
When an invoice is received for payment, it is compared with which of the following documents before payment is made?
- A.
The bill of lading
- B.
The original purchase order
- C.
The purchase requisition
- D.
The account debit memo posted at the time of entry
Correct Answer
B. The original purchase orderExplanation
Before making a payment for an invoice, it is compared with the original purchase order. This is because the purchase order contains the details of the products or services ordered, including the quantity, price, and terms. By comparing the invoice with the purchase order, the company can ensure that the goods or services received match what was originally ordered and agreed upon. This helps to prevent overpayment or payment for goods or services that were not received or agreed upon.Rate this question:
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- 9.
Which of the following would be considered the most important factor in supplier selection?
- A.
Proximity to the plant
- B.
Lowest price
- C.
Product quality
- D.
Reciprocal arrangements
Correct Answer
C. Product qualityExplanation
Product quality would be considered the most important factor in supplier selection because it directly affects the quality of the final product or service provided by the company. If the supplier's products do not meet the required standards or specifications, it can negatively impact the company's reputation and customer satisfaction. Therefore, selecting a supplier that consistently delivers high-quality products is crucial for maintaining the company's competitiveness and meeting customer expectations.Rate this question:
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- 10.
A control chart is primarily used to determine which of the following?
- A.
The percentage defective in the goods being produced
- B.
The specification limits
- C.
The capability of the process
- D.
Normal variation versus assignable variation
Correct Answer
D. Normal variation versus assignable variationExplanation
A control chart is primarily used to determine the presence of normal variation versus assignable variation in a process. Normal variation refers to the expected random fluctuations that occur in a process, while assignable variation refers to any non-random factors that cause the process to deviate from its expected behavior. By monitoring and analyzing the data plotted on a control chart, one can identify whether the variations in the process are within the expected range or if there are specific factors causing the process to deviate. This helps in identifying and addressing any issues or problems that may be affecting the process performance.Rate this question:
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