Cima P2 Exam Question 41

Question No 41:

A manufacturing company has recently introduced a Total Quality Management (TQM) system. The company has invested heavily in the education and training of its staff, in addition to implementing new product design engineering. There is a plan to sample units from each batch of products manufactured to test for errors, although this has not yet been implemented due to budget constraints.

The company is experiencing high levels of customer complaints, with many faulty units being returned by the customer for refund or replacement. Sales revenue has fallen recently, mainly due to negative press coverage linked to dissatisfied customers.

Select the statement MOST likely to apply.

A. The high level of external failure costs is the result of a lack of expenditure on prevention costs.
B. The high level of internal failure costs is the result of a lack of expenditure on appraisal costs.
C. The high level of external failure costs is the result of a lack of expenditure on appraisal costs.
D. The high level of internal failure costs is the result of a lack of expenditure on prevention costs.

Answer: C