Optimising quality costs MCQs With Answer

Introduction: Optimising quality costs MCQs With Answer is designed for M.Pharm students to deepen understanding of Cost of Quality (CoQ) concepts specific to pharmaceutical quality management. This quiz-oriented guide explains how prevention, appraisal, internal and external failure costs affect product quality, regulatory compliance and profitability in the drug industry. Questions focus on practical applications—validation, stability failures, CAPA, supplier qualification, calibration and economic trade-offs of quality investments—helping students analyse, measure and reduce hidden and visible quality costs. Use these MCQs to prepare for examinations and to build skills in designing cost-effective quality systems that protect patient safety while optimising resources.

Q1. Which of the following best defines the ‘Cost of Quality’ in a pharmaceutical setting?

• Costs incurred for marketing a pharmaceutical product
• Sum of all costs related to preventing, detecting and correcting defective products or nonconformities
• Only the costs of rejected batches and recalls
• Investment in new product development excluding quality activities

Correct Answer: Sum of all costs related to preventing, detecting and correcting defective products or nonconformities

Q2. Which category of quality cost is primarily associated with activities like process validation, staff training and preventive maintenance?

• Appraisal costs
• External failure costs
• Prevention costs
• Internal failure costs

Correct Answer: Prevention costs

Q3. A stability study failure leading to batch rejection after release is classified as which type of quality cost?

• Appraisal cost
• External failure cost
• Internal failure cost
• Prevention cost

Correct Answer: External failure cost

Q4. Which of the following is a primary example of appraisal cost in a GMP environment?

• Calibration of analytical instruments
• Customer complaint settlement
• Rework of a contaminated batch
• Supplier development programs

Correct Answer: Calibration of analytical instruments

Q5. Which statement about prevention costs and overall CoQ is most accurate?

• Increasing prevention costs always increases total CoQ
• Reducing prevention efforts tends to reduce overall CoQ
• Optimal increase in prevention costs can reduce appraisal and failure costs, lowering total CoQ
• Prevention costs only benefit marketing and have no impact on failures

Correct Answer: Optimal increase in prevention costs can reduce appraisal and failure costs, lowering total CoQ

Q6. In a Pareto analysis of quality costs where 80% of costs stem from 20% of causes, what should the quality team prioritise?

• Addressing the 80% of low-impact causes first
• Focusing on the 20% high-impact causes that drive most costs
• Eliminating appraisal activities entirely
• Outsourcing all quality functions

Correct Answer: Focusing on the 20% high-impact causes that drive most costs

Q7. Which of the following is a hidden quality cost often underestimated in pharma companies?

• Documentation of batch records
• Time lost by employees dealing with investigations and deviations
• Calibration service fees
• Cost of raw materials

Correct Answer: Time lost by employees dealing with investigations and deviations

Q8. If a preventive maintenance program costs $50,000 annually but reduces batch failures and recall-related costs from $200,000 to $50,000, what is the net savings?

• $100,000
• $50,000
• $150,000
• $200,000

Correct Answer: $150,000

Q9. Which metric is most useful for tracking the efficiency of quality control testing labs?

• Number of marketing campaigns
• Percentage of out-of-specification (OOS) results per total tests
• Total procurement costs
• Employee turnover rate in sales

Correct Answer: Percentage of out-of-specification (OOS) results per total tests

Q10. In Cost of Quality reporting, what is the rationale for separating internal and external failure costs?

• Internal failures are less important than external ones
• External failures typically have higher visibility, regulatory and patient safety impacts, whereas internal failures primarily represent internal scrap and rework costs
• To increase the number of reportable cost categories without practical benefit
• Because internal failures do not affect product quality

Correct Answer: External failures typically have higher visibility, regulatory and patient safety impacts, whereas internal failures primarily represent internal scrap and rework costs

Q11. Which activity would most likely shift cost from appraisal to prevention when optimising quality costs?

• Increasing the number of final release tests
• Implementing robust incoming supplier qualification and control
• Reducing stability testing duration
• Delaying equipment maintenance

Correct Answer: Implementing robust incoming supplier qualification and control

Q12. A pharmaceutical company wants to prioritise projects that give the highest return on quality investment. Which analysis helps quantify expected savings versus cost?

• SWOT analysis
• Return on Investment (ROI) and Cost-Benefit Analysis specific to quality projects
• PESTEL analysis
• Only regulatory inspection reports

Correct Answer: Return on Investment (ROI) and Cost-Benefit Analysis specific to quality projects

Q13. Which of the following is an example of an external failure cost unique to pharmaceuticals?

• Cost of in-process corrective action
• Regulatory recall and associated communication expenses
• Calibration of HPLC systems
• Preventive maintenance contracts

Correct Answer: Regulatory recall and associated communication expenses

Q14. When quantifying quality costs, which approach best uncovers indirect and intangible costs such as lost reputation and reduced market share?

• Direct ledger-only accounting without qualitative assessment
• Comprehensive CoQ program combining financial accounting, activity-based costing and qualitative impact assessment
• Counting only scrap and rework expenses
• Focusing exclusively on headcount costs in quality department

Correct Answer: Comprehensive CoQ program combining financial accounting, activity-based costing and qualitative impact assessment

Q15. Which tool is most appropriate to identify recurring root causes of high internal failure costs like contamination events?

• Random sampling
• Root Cause Analysis (RCA) methods such as Fishbone/Ishikawa and 5 Whys
• Only increasing batch release testing
• Marketing surveys

Correct Answer: Root Cause Analysis (RCA) methods such as Fishbone/Ishikawa and 5 Whys

Q16. How does implementing Quality by Design (QbD) principles typically affect quality costs over product lifecycle?

• Increases lifecycle costs by adding unnecessary activities
• Reduces failure and appraisal costs long-term by embedding quality into development and manufacturing
• Has no measurable impact on CoQ
• Only affects regulatory timelines without cost benefit

Correct Answer: Reduces failure and appraisal costs long-term by embedding quality into development and manufacturing

Q17. Which of the following best describes ‘Appraisal’ activities that can be optimised to reduce total CoQ?

• Activities that detect nonconformities such as in-process testing, release testing and audits, which can be optimised by risk-based testing strategies
• Supplier development programs
• Marketing and distribution
• Employee payroll in manufacturing

Correct Answer: Activities that detect nonconformities such as in-process testing, release testing and audits, which can be optimised by risk-based testing strategies

Q18. A change control reduces the number of OOS investigations by automating a critical process. Which qualitative benefit should also be considered in CoQ assessment?

• Only the cost of the automation equipment
• Reduced regulatory risk, improved cycle time, and better staff allocation for value-adding tasks
• Increased paperwork from automation
• Higher external failure costs

Correct Answer: Reduced regulatory risk, improved cycle time, and better staff allocation for value-adding tasks

Q19. In an activity-based costing (ABC) system for quality costs, what advantage is achieved versus traditional accounting?

• ABC hides the true drivers of quality costs
• ABC allocates indirect quality costs to specific products and processes, revealing accurate cost drivers for targeted improvement
• ABC removes the need for regulatory compliance
• ABC reduces the number of quality staff

Correct Answer: ABC allocates indirect quality costs to specific products and processes, revealing accurate cost drivers for targeted improvement

Q20. Which strategy is least effective for optimising quality costs in a pharmaceutical company?

• Investing in employee training and procedural standardisation
• Implementing risk-based monitoring and testing to focus resources
• Ignoring supplier quality and relying solely on incoming testing
• Using data analytics to prioritise corrective actions

Correct Answer: Ignoring supplier quality and relying solely on incoming testing

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