The ISO 31000 standard can be best used for which of the following actions?
The ISO 31000 standard provides a set of principles, guidelines, and best practices for risk management that can be applied to any organization, regardless of its size, industry, or sector. It is designed to help organizations identify, assess, and mitigate risks in a systematic and consistent manner. The standard is not intended for certification purposes (option A) but rather for providing a comprehensive framework for managing risk. It can be used to compare risk management practices to some extent (option C) and to inform the creation of industry-specific practices (option D), but its primary purpose is to offer generic guidelines. Reference: ISO 31000:2018 - Risk management -- Guidelines.
A company that is focused on customer relationship management is most likely to take which of the following actions for customers who have been profitable over time?
Customer Relationship Management (CRM) focuses on maintaining and enhancing relationships with customers, particularly those who have been profitable over time. By targeting these profitable customers for greater attention, a company can further deepen customer loyalty, enhance satisfaction, and potentially increase their lifetime value. This can include personalized services, special offers, and proactive communication. This approach ensures that the most valuable customers feel appreciated and are less likely to switch to competitors. Reference:
'Customer Relationship Management: Concept, Strategy, and Tools' by V. Kumar and Werner Reinartz
'The CRM Handbook: A Business Guide to Customer Relationship Management' by Jill Dych
A firm has discovered a product quality issue. What should be the first step in responding to this issue?
Quality Issue Response: Addressing a quality issue requires a systematic approach to identify and eliminate the problem.
Root Cause Analysis: The first step is to understand why the issue occurred to prevent recurrence. This involves investigating the processes, materials, and procedures that may have contributed to the defect.
Explanation of Choice:
Option B: Separating non-conforming products is necessary but should follow root cause analysis.
Option C: Tracing the location of faulty products is part of containment but not the first step.
Option D: Replacing faulty products addresses customer satisfaction but does not prevent future issues.
Juran, J. M., & Godfrey, A. B. (1999). Juran's Quality Handbook. McGraw-Hill Education.
Ishikawa, K. (1985). What Is Total Quality Control? The Japanese Way. Prentice Hall.
A company has recently implemented a vendor-managed inventory (VMI) program with several key suppliers but quality issues are disrupting production. Which of the following actions would be more effective in dealing with these issues?
Implementing a supplier certification program involves setting quality standards and certifying suppliers that meet these standards consistently. This proactive approach ensures that suppliers are capable of delivering quality products, reducing the occurrence of quality issues that disrupt production. Tightening quality tolerances and implementing inspection at the receiving dock are reactive measures that address issues after they occur, while charging back rework costs may strain supplier relationships. A supplier certification program promotes long-term quality improvement and fosters a collaborative relationship between the company and its suppliers. Reference:
Krajewski, L. J., Malhotra, M. K., & Ritzman, L. P. (2019). Operations Management: Processes and Supply Chains. Pearson.
Heizer, J., Render, B., & Munson, C. (2020). Operations Management: Sustainability and Supply Chain Management. Pearson.
A firm experiences a supply chain interruption from a second-tier supplier. Which of the following actions is the firm likely to take to minimize future interruptions?
To minimize future supply chain interruptions from a second-tier supplier, the firm should map the supplier's supply chain to identify risks and opportunities. This involves:
Supply Chain Mapping: Creating a visual representation of the supplier's supply chain helps in understanding the flow of materials, components, and information.
Identifying Risks: By mapping the supply chain, the firm can identify potential points of failure, such as single-source dependencies, geographic risks, or capacity constraints.
Assessing Opportunities: Mapping also reveals opportunities for improvement, such as alternative suppliers, process enhancements, or inventory optimization.
Proactive Risk Management: With a comprehensive view of the supply chain, the firm can develop risk mitigation strategies, such as diversifying suppliers, increasing safety stock, or enhancing communication channels.
'The Supply Chain Risk Management Guide' by James B. Rice Jr. and Craig A. Zsidisin
APICS, 'Risk Management in the Supply Chain'
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