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ACC - Wharedale manufactures

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Question;Quality Initiative DecisionWharedale manufactures high-quality speakers. Suppose Wharfedale is considering spending for the following amounts on a new quality program.Additional 20 minutes of testing for each speaker $600,000Negotiating with and training suppliers to obtain higher-quality materialsAnd on time delivery $300,000Redesigning the speakers to make them easier to manufacture $1,400,000Wharfedale expects this uality program to save costs as follows:Reduced warranty repair costs $200,000Avoid inspection of raw materials $400,000Rework avoided because of fewer defective units $650,000It also expects this program to avoid lost profits from the following:Lost sales due to disappointed customers $850,000Lost production time due to rework $300,000Classify each of these costs into one of the four categories of quality costs (prevention, appraisal, internal failure, external failure).Should Wharfedale implement the quality program? Give your reasons.

 

Paper#41111 | Written in 18-Jul-2015

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