ICBB Cost Practice Questions

A Belt has determined that the inventory of repair parts at a rework station can be reduced by 45%. According to Cost of Poor Quality (COPQ) definitions inventory reduction would be considered ______.

• AA. Soft Savings
• BB. COPQ efficiency
• CC. Median Savings
• DD. Hard Savings

A Belt working in a supply chain environment has to make a decision to change suppliers of critical raw materials for a new product upgrade. The purchasing manager is depending on the Belt’s effort requiring that the average cost of an internal critical raw material component be less than or equal to $4,200 in order to stay within budget. Using a sample of 35 first article components, a Mean of the new product upgrade price of $4,060, and a Standard Deviation of $98 was estimated. The Alternative Hypothesis in the above example is?

• AA. The Standard Deviation is equal to $300.
• BB. The Mean is less than $4,320.
• CC. The Mean is equal to $4,060.
• DD. The Mean is less than $4,200.
• EE. The Mean is greater than $ 4,200.

A Belt working in a supply chain environment has to make a decision to change suppliers of critical raw materials for a new product upgrade. The purchasing manager is depending on theBelt’s effort requiring that the average cost of an internal critical raw material component be less than or equal to $3,600 in order to stay within budget. Using a sample of 42 first article components, a Mean of the new product upgrade price of $3,200 and a Standard Deviation of $180 was estimated. Based on the data provided, the Z value for the data assuming a Normal Distribution is?

• AA. 1.11
• BB. 2.22
• CC. 4.30
• DD. 5.42