Question

Indicate the best answer for each question in the space provided. 1Examples of value-added activities include all of the following except a Product design Material movement. Assembly activities Establish an effective distribution network. d 2 Of the following components of total quality cost, which is most damaging to a company attempting to achieve a reputation as a world-class manufacturer? a Prevention costs b Appraisal costs c Intermal failure costs d External failure costs Of the following processes, which is chiefly concemed with products and services that have not yet been developed? a Just-in-time manufacturing b Activity-based management. c Target costing. d Total quality management. 3 4For a furniture manufacturer, which of the following activities could not be eliminated without changing the customer's perception of the product's desirability? a Ispection of incoming shipments of wood and fabrics b Movement of work-in-process from one work station to another c Set-up of machinery to produce different pieces of fumiture d Reducing the product's distribution network. 5 The cost borne by the customer of disposing of nickel-cadmium batteries is a component of the batteries a Life-cycle cost. b Overhead cost. c Cost of quality d Direct production cost.

Answer 1

Ques 1
b.	Material movement
this activity increases cycle time
as using JIT , the material will be kept close to the production site to reduce the
material movement time
Ques 2
d)External failure costs
these are incurred due to failure of service/product at the customer site
this results into warranty costs and damage of reputation
Ques 3
c)Target costing
this is actually a back calculation , where the management with its target profit
sets the target costs to be achieved .this is primarly done for a new product/service
Ques 4
d)All of the above
inspection can be reduced by asking the supplier for quality products or inspecting at his site
movment can be reduced by keeping materials at production site
setting up machinery though all of it cannot be eliminated but can be reduced though by
having a dedicated personnel to set up machine and look after its maintenance
Ques 5
a)Life cycle cost
as the term life cycle the costs related to disposal relates to the product at the end of its life