Which of the Following Statements About Total Quality Management (TQM)

question 245

Multiple Choice

Which of the following statements about total quality management (TQM) is false?

• A) Before widespread adoption of TQM, most firms assumed that production defects were an inevitable part of mass production.
• B) Japanese producers of cars, electronics and cameras showed that production defects were not inevitable.
• C) From a TQM perspective, the cost of lost customers is a minor consequence of poor quality.
• D) From a customer's point of view, getting a defective product and having to complain about it is inconvenient.
• E) TQM methods have been applied to implementation problems other than manufacturing.

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Definitions:

Transaction Costs

Transaction costs are the expenses incurred in buying or selling goods or services, which can include search and information costs, bargaining costs, and enforcement costs.

Optimal Pigouvian Tax

A tax designed to correct the inefficiencies in a market that experiences externalities, set at a level that equates the marginal social cost of the externality with the marginal social benefit.

Socially Optimal

Pertains to a condition where resources are allocated in the most efficient manner from the perspective of society as a whole.

Pollution

The presence or introduction of harmful substances or contaminants into the natural environment, causing adverse effects.