1. Identify a true statement about the role of quality in gaining a competitive advantage.

a. Producers of low-quality goods are able to still charge higher prices, even in crowded and over competitive markets or market niches.

b. A strategy of quality improvement is usually accompanied by increased short-run profitability.

c. Producers of high-quality goods usually charge low prices.

d. Quality is unrelated to return on investment for most kinds of market situations. e. Businesses offering premium-quality goods usually have large market shares.

2. In an assembly line of a factory that makes gears, it takes fifteen minutes to complete a drilling operation using a lathe. The duration of this operation is called _____.

a. delay time

b. queue time

c. processing time

d. standard time

3. The_____________is based on a set of cause-and-effect linkages between internal and external performance, and in this fashion, defines the key performance measurements on which service-based firms should focus.

a. Service-Profit Chain model

b. value chain model

c. balanced scorecard inversion model

d. Malcolm Baldrige Performance Excellence program

4. Which of the following is a difference between the evaluation of goods and the evaluation of services by customers?

a. Customers rely more on information from non- personal sources when evaluating services, whereas they rely more on information from personal sources when evaluating goods.

b. Customers perceive lesser risks when buying services, whereas they perceive greater risks when buying goods.

c. Customers cannot look at or touch services prior to the purchase decision, whereas they can feel a product prior to purchase.

d. Customers adopt innovations in services faster, whereas they resist adopting innovations in products.