Final answer:
In quality management, using accurate standards to identify and eliminate problems is a key principle of continuous improvement. To reduce the risk of imperfect information, businesses should utilize strong data practices and seek regular feedback. This approach helps ensure product quality and appropriate pricing and quantity decisions are based on accurate information.
Step-by-step explanation:
Key principles of continuous improvement in quality management are focused on enhancing all aspects of a business process by seeking incremental improvements over time, or implementing breakthrough improvements all at once. A correct principle from the provided options is to use accurate standards to identify and eliminate problems. Continuous improvement involves several core principles, such as customer focus, employee empowerment, process approach, systematic problem solving, and a continuous improvement culture.
To reduce the risk of imperfect information, businesses can adopt robust data collection and analysis methods, seek feedback from customers and employees, and continuously monitor and adapt their processes. Imperfect information can significantly affect a company's outputs and customer perceptions, leading to variations in price, quantity, and quality. For instance, if a business does not understand customer needs due to imperfect information, it may produce an inferior product that customers do not value, leading to a decrease in demand and potentially lower prices to clear inventory.