IB Business 5.4

What is the term used for turning inputs into outputs with the least possible costs?

• Waste

• Quality

• Efficiency

• Turnover

Answer explanation

This concept directly links to lean production and is inherently about how quickly a business can turn inputs into the production process into useful goods and services. 

Which system uses professional inspectors who only check the quality of the good once the production process is complete?

• Quality Circles

• Quality Control

• Quality Assurance

• Quality Standards

Answer explanation

Quality control inspectors only check the quality of a good once it has been completed. This differs from quality assurance, which involves every employee in the quality process, with staff checking their own work, rather than waiting for the final product to be completed.  

Which model of production involves recycling products and ensuring inputs are biodegradable? 

• Lean Production

• Cradle to Cradle

• Total Quality Management

• Just in Time

Answer explanation

Cradle-to-cradle design and production uses the philosophy of sustainability to underpin the biological and technological process. The use of biodegradable inputs and the use of recycling are fundamental to its purpose as a production method. 

Which of the following is a disadvantage of meeting quality standards?

• Higher prices for customers

• Improved employee motivation levels

• Increased customer loyalty

• Competitive differentiation

Answer explanation

Having and enforcing quality standards is expensive. This cost is transferred to the customer and increases the selling price. 

What is the world’s most widely recognized quality standard?

It is awarded to organizations that maintain an efficient quality system

• TQM 3000

• Emirates Quality Mark

• ISO 9000

• International Star Award for Quality (ISAQ)

Quality management requires businesses to adopt mass customization manufacturing processes.

• True

• False

Answer explanation

False - it is not unique to any operations method

Which of the following is NOT a method of managing quality?

• benchmarking

• quality circles

• TQM

• Kaizen

Answer explanation

Kaizen is a method of lean production

Lean production is the approach to quality management that aims to involve all employees in the quality improvement process.

• True

• False

Answer explanation

False - this is quality assurance

Cradle to cradle focuses on the 5 Rs

- which word below is NOT one of the R's related to C2C

• Reuse

• Rot

• Recycle

• Repair

Refer to the data below for a firm that produces bluetooth loudspeakers, and then answer the following questions.

• Sales price per loudspeaker = $250

• Variable cost per loudspeaker = $150

• Total fixed cost = $35,000

• Target profit = $40,000

• Calculate the break even quantity

• 140

• 350

• 500

• 188

Answer explanation

• BEQ = TFC / (P - AVC)

• BEQ = 35,000 / ($250 - $150)

• = 35,000 / 100

• = 350