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MGSC 625E1 Assignment 8 Fall 2014




Problem 2.6;The Colonial House Furniture Company manufactures four-drawer oak filing cabinets in six stages. In the first stage, the boards forming the walls of the cabinet are cut, in the second stage, the front drawer panels are woodworked, in the third stage, the boards are sanded and finished, in the fourth stage, the boards are cleaned, stained, and painted with a clear finish, in the fifth stage, the hardware for pulls, runners, and fit- tings is installed, and in the final stage, the cabinets are assembled. Inspection occurs at each stage of the process, and the average percentages of good quality units are as follows.;Problem 2-11;Burger Doodle is a fast-food restaurant that processes an average of 680 food orders each day. The average cost of each order is $6.15. Four percent of the orders are incorrect, and only 10% of the defective orders can be corrected with additional food items at an average cost of $1.75. The remaining defective orders have to be thrown out.;a. Compute the average product cost.;b. In order to reduce the number of wrong orders, Burger Doodle is;going to invest in a computerized ordering and cash register sys- tem. The cost of the system will increase the average order cost by $0.05 and will reduce defective orders to 1%. What is the annual net cost effect of this quality-improvement initiative?;c. What other indirect effects on quality might be realized by the new computerized order system?


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