If a Small Plumbing Company Is Installing a TQM Program

question 30

Multiple Choice

If a small plumbing company is installing a TQM program, management should be aware that

• A) quality must become a very important goal of the entire business.
• B) ISO 9000 will be the controlling criterion.
• C) costs cannot be allowed to limit quality goals.
• D) acceptance sampling may be necessary.

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Definitions:

Shareholders

Individuals or institutions that own shares in a corporation, giving them a stake in the company's ownership and profits.

Adverse Selection Problem

A situation where asymmetric information leads to the selection of poor-quality goods or candidates, as the chooser lacks information to make an optimal decision.

Incompetent

Lacking the necessary skills, qualities, or ability to effectively perform a specific job or task.

Moral Hazard

The risk that a party insulated from risk may behave differently than if they were fully exposed to the risk.