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| 1. Investing in the same TQM Initiative round after round will create A. ever increasing returns
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....
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