Quality improvement, Pareto diagram, cause-and-effect diagram. The Murray Corporation manufactures, sells, and installs photocopying machines. Murray has placed heavy emphasis on reducing defects and failures in its production operations. Murray wants to apply the same total quality management principles to manage its accounts receivable.

1. On the basis of your knowledge and experience, what would you classify as failures in accounts receivable?

2. Give examples of prevention activities that could reduce failures in accounts receivable.

3. Draw a Pareto diagram of the types of failures in accounts receivable and a cause-and-effect diagram of possible causes of one type of failure in accounts receivable.