B. diminishing returns
C. the same amount of return
With sufficient investment, initiatives will improve processes and quality to the greatest extent possible, however, each initiative will reach a point where no further improvement is possible, therefore the investments create no additional returns.
2. According to the S-Shaped curve, diminishing returns for a single year budget become noticeable at A. $1,000,000
The S-Shaped curve predicts return on investment. Depending on the slope of the curve, the return on investment can be small or large. For example, suppose a project is budgeted at $500,000. This project might go through a planning stage that produces a set of recommendations, but there is no money left to implement the recommendations. At $1,000,000, sufficient funds are available to plan, and begin implementing the recommendations. At $1,500,000, the budget is sufficient to plan and put in place most of the recommendations. At $2,000,000, all of the recommendations have been implemented, and additional money beyond that level has little or no effect.
3. If a company with low automation wanted to invest in a single area that exclusively lowers labor costs, they would select: A. QIT (Quality Initiative Training)
B. Concurrent Engineering
C. Vendor/JIT (Just in Time [Inventory])
The TQM area allows teams with an established strategy to invest in areas which will benefit them the most. For example, if a team formulates a strategy that sacrifices labor cost so it can complete R&D projects faster, it would want to invest in QIT, which reduces labor costs....