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ACC - Wharedale manufactures

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Quality Initiative Decision;Wharedale 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 $600,000;Negotiating with and training suppliers to obtain higher-quality materials;And on time delivery $300,000;Redesigning the speakers to make them easier to manufacture $1,400,000;Wharfedale expects this uality program to save costs as follows;Reduced warranty repair costs $200,000;Avoid inspection of raw materials $400,000;Rework avoided because of fewer defective units $650,000;It also expects this program to avoid lost profits from the following;Lost sales due to disappointed customers $850,000;Lost production time due to rework $300,000;Classify 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#81018 | Written in 18-Jul-2015

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