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Supplementary objective test questions

CHAPTER 2 – THE MODERN BUSINESS ENVIRONMENT

2.1 Which of the following are true statements regarding Just-In-Time (JIT)?

(i) JIT is a pull system. Nothing is produced until a customer makes a
request.

(ii) JIT requires a good relationship with suppliers. Raw materials need to be
delivered on time, and must be of the correct quality and specification.

(iii) JIT reduces inventory to as close to nil as possible. Items are produced
and orders are placed for a specific customer order, not for stockpiling.

(iv) Traditional performance measures such as inventory turnover and
individual targets are replaced by measures such as inventory days, team
productivity and minimising quality failures.

A (i) and (ii)

B (ii) and (iv)

C (i) and (iii)

D All of the above

2.2 Match the following definitions for the ‘Four Quality Costs’ with the
correct heading.

Prevention The costs of inspection and testing

Appraisal Costs from a failure. However, this failure is found
by the customer

Internal failure costs The cost of implementing a system to prevent
defects before they actually occur

External failure costs Costs from a failure. However, this failure is found
before the failure is found by the customer

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