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Note: This quiz references information available in the section

7.2 of the Online Managers Guide. The numbers that appear in

section 7.2 of the printed Foundation Student Guide are
incorrect. Please use the Online Guide when answering this quiz.
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1. The TQM report can be accessed from
A. The Foundation(r) FastTrack
B. The Decisions menu
The TQM information appears on the last page of the Foundation FastTrack.

2. 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

3. According to the S-Shaped curve, diminishing returns for a single year budget
become significant at
A. $1,000,000
B. $1,500,000
C. $750,000
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 $250,000. 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 $500,000, sufficient funds are available to plan, and
begin implementing the recommendations. At $750,000, the budget is sufficient to
plan and put in place most of the recommendations. At $1,000,000, all of the
recommendations have been implemented, and additional money beyond that level
has little or no effect.

4. The exact outcome of TQM efforts appear on the TQM Report, and as bar charts
on the TQM spreadsheet. These results are for

A. the previous round only

B. the upcoming round only
C. cumulative for the previous and all remaining rounds (assuming no
additional investment is made)
TQM investments take effect the year they are made, and are cumulative, paying
off year after year.

5. 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.