Which one of the following is a consequence of external failures? (A) increased productivity (B) decreased lead time (C) increased inventory costs (D) increased returns
Answer (1)
In the context of business and quality management, external failures refer to problems with a product or service that are discovered after they reach the customer. These problems can manifest as defects, inaccuracies, or performance issues that lead to dissatisfaction on the part of the customer.
Among the options given:
(A) Increased productivity: External failures do not typically lead to increased productivity. In fact, they require resources to be allocated to address the defects, which can decrease productivity.
(B) Decreased lead time: External failures usually lead to increased lead time as companies have to address returns and rectify issues, rather than speeding up the production or delivery process.
(C) Increased inventory costs: While external failures may require companies to hold more products in inventory if there are recalls or replacements, this is more about potential indirect costs rather than a direct consequence, so it's less typical.
(D) Increased returns: This is the most direct consequence of external failures. When products fail in their intended purpose after reaching the customer, it often results in products being returned or exchanged. This also incurs additional costs related to handling returns, processing refunds, or making replacements.
Therefore, the correct answer is (D) increased returns. This encapsulates a direct impact of external failures, which is the need to return defective products, maintain customer satisfaction, and correct the issues identified. External failures are critical for businesses to manage, as they directly impact customer loyalty and the company's reputation.
