Practice Questions with
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2026/2027 Update.
TQM: Total Quality Management
is an integrated organizational effort designed to improve quality at every level.
Customer Defined Quality
TQM is about meeting quality expectations as defined by the customer.
Conformance to specification
measures how well the product or service meets the targets and tolerances
determined by its designers.
Example of Conformance to specification
The wait for hotel room service may be specified as 20 minutes, but there may
be an acceptable delay of an additional 10 minutes.
Also, consider the amount of light delivered by a 60-watt light bulb. If the bulb
delivers 50 watts, it does not conform to specifications.
Fitness for use
focuses on how well the product performs its intended function or use.
Example of Fitness for use
,For example, a Mercedes-Benz and a Jeep Cherokee both meet a fitness for use
definition if one considers transportation as the intended function. However, if
the definition becomes more specific and assumes that the intended use is for
transportation on mountain roads and carrying fishing gear, the Jeep Cherokee
has a greater fitness for use. You can also see that fitness for use is a user-
based definition in that it is intended to meet the needs of a specific user
group.
Value for a price paid
is a definition of quality that consumers often use for product or service
usefulness. This is the only definition that combines economics with consumer
criteria; it assumes that the definition of quality is price sensitive.
Examples of Value for a price paid
For example, suppose that you wish to sign up for a personal finance seminar
and discover that the same class is being taught at two different colleges at
significantly different tuition rates. If you take the less expensive seminar, you
will feel that you have received greater value for the price.
Support Services
provided are often how the quality of a product or service is judged. Quality
does not apply only to the product or service itself; it also applies to the
people, processes, and organizational environment associated with it.
Example of Support Services
For example, the quality of a university is judged not only by the quality of staff
and course offerings but also by the efficiency and accuracy of processing
paperwork.
Psychological Criteria
is a subjective definition that focuses on the judgmental evaluation of what
constitutes product or service quality. Different factors contribute to the
evaluation, such as the atmosphere of the environment or the perceived
prestige of the product.
Examples of Psychological Criteria
,For example, a hospital patient may receive average healthcare, but a very
friendly staff may leave the impression of high quality. Similarly, we commonly
associate certain products with excellence because of their reputation; Rolex
watches and Mercedes-Benz automobiles are examples.
Manufacturing Organizations
Manufacturing organizations produce a tangible product that can be seen,
touched, and directly measured. Examples include cars, CD players, clothes,
computers, and food items.
Quality in manufacturing organizations
quality definitions in manufacturing usually focus on tangible product features.
Common quality definition in manufacturing
1. Conformance: the degree to which a product characteristic meets preset
standards.
2. Performance: such as acceleration of a vehicle
3. Reliability: meaning that the product will function as expected without
failure
4. Features: the extras that are included beyond the basic characteristics
5. Durability: the expected operational life of the product
6. Serviceability: how readily a product can be repaired
Service Organizations
service organizations produce a product that is intangible. Usually, the
complete product cannot be seen or touched. Rather, it is experienced. The
intangible nature of the product makes defining quality difficult.
Examples of Service Organizations
delivery of healthcare, the experience of staying at a vacation resort, and
learning at a university.
Quality of Service is defined by perceptual factors
1. Responsiveness to customers needs/
2. Courtesy and friendliness of staff.
3. Promptness in resolving complains.
, 4. Atmosphere
5. Time: the amount of time a customer has to wait for the service.
6. Consistency: the degree to which service is the same each time.
Quality Control Costs
Cost necessary for achieving high quality.
Two types of Quality Control Costs
1. Prevention costs.
2. Appraisal costs.
Prevention Costs
are all costs incurred in the process of preventing poor quality from occurring.
Costs includes the following.
1. quality planning costs, such as the costs of developing and implementing a
quality plan.
2. cost of product and process design.
3. Employee training in quality measurement.
4. Cost of maintaining records of information and data related to quality.
Appraisal Costs
incurred in the process of uncovering defects. They include the following;
1. Cost of quality inspections.
2. Product testing.
3. performing audits to make sure that quality standards are being met.
4. costs of worker time spent measuring quality
5. cost of equipment used for quality appraisal.
Quality Failure Costs
Cost consequences of poor quality.
Two types of Quality Failure Costs
1. External Failure Costs
2. Internal Failure Costs
Internal Failure Costs