When a Process Appears to Be Functioning Properly When, If

question 28

Multiple Choice

When a process appears to be functioning properly when, if fact, it is out of control, the type of error and injured party is identified as:

• A) Type I error, producer's risk
• B) Type II error, consumer's risk
• C) Type I error, consumer's risk
• D) Type II error, producer's risk

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Definitions:

Cheques Clear

Refers to the process by which a bank verifies that the funds available in the account of the individual who wrote the cheque are sufficient to cover the amount, and subsequently moves those funds to the account of the cheque recipient.

Incremental Bad Debt

Additional losses expected from non-payment or default by borrowers beyond what was originally anticipated.

Bad Debt Losses

Financial losses a company incurs when it cannot collect payment from a borrower or customer.

Decline

A decrease in the value or quantity of something.