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Six Sigma Green Belt Exam Prep

Category - Six Sigma Green Belt

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A national dairy farm is facing significant revenue losses due to customer returns and store rejections of their milk products. Executives wish to quantify the actual cost of poor quality on revenues. Cost of Poor Quality (COPQ) includes the following EXCEPT:
  1. cost of labor to repair a problem
  2. cost of failure prevention programs
  3. cost of new and extra materials used
  4. cost of additional utilities used
Explanation
Answer: B - Cost of Poor Quality (COPQ) calculations do not include prevention or training programs.
Key Takeaway: COPQ contain the material, labor, utilities costs of producing and repairing defective materials and goods. They also include lost opportunities to collect revenues and potential market shares that could be replaced by competitors such as those in the same area as the dairy farm.
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