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Value-Adding; Activity-Based Management; Just-In-Time System
6. Next Generation Information Systems, Inc. pays salaries to a number of computer scientists to design and develop computer operating systems. Into which component of the value chain would this cost be classified?
a. Research and development and design.
b. Suppliers and production.
c. Distribution and marketing.
d. Customer service.
7. Of the following activities performed by a manufacturer of roller blades, which are value-adding?
a. Inspection of direct materials upon receipt from suppliers.
b. Storage of direct materials until needed for production.
c. Transfer of direct materials to appropriate points on the
d. None of the above are value-adding activities.
8. The primary objective of activity-based management is:
a. To develop more accurate product costs.
b. To reduce and eliminate non-value added activities.
c. To increase product quality.
d. To identify instances of internal failure.
9. Which of the following is not considered a goal of a just-in-time system?
a. Zero defects.
b. Cost savings.
c. Flexible manufacturing.
d. Numerous suppliers.
10. In a program of total quality management, the costs of external failure are the largest and most difficult to measure.
11. "ISO 9000" certification requires an internal detailed audit and documentation of the processes and procedures a company has implemented for quality conformance.