The following cost-of-quality data were collected at the installment loan department of the Kenney Bank. Classify these data into the appropriate cost-of-quality categories.
The following cost-of-quality data were collected at the installment loan department of the Kenney Bank. Classify these data into the appropriate cost-of-quality categories.
| Quality Cost | Amount | Cost Classification | ||
| Loan Processing | ||||
| 1. | Run credit checks: | $2,737.54 | ||
| 2. | Review documents: | $3,173.50 | ||
| 3. | Make document corrections; gather additional information: | $1,126.00 | ||
| 4. | Prepare tickler file; review and follow up on titles, | $190.60 | ||
| insurance, second meetings: | ||||
| 5. | Review all output: | $2,330.62 | ||
| 6. | Correct rejects and incorrect output: | $486.35 | ||
| 7. | Reconcile incomplete collateral report: | $70.82 | ||
| 8. | Handle dealer problem calls; address associate problems; | $2,530.00 | ||
| research and communicate information: | ||||
| 9. | Compensate for system downtime: | $526.93 | ||
| 10. | Conduct training: | $1,010.00 | ||
| Loan Payment | ||||
| 1. | Receive, inspect, and process payments: | $790.00 | ||
| 2. | Respond to inquiries when no coupon is presented with payments: | $840.30 | ||
| Loan Payoff | ||||
| 1. | Receive, inspect, and process payoff and release documents: | $221.65 | ||
| 2. | Research payoff problems: | $15.54 |
Calculate the amount and the percent of total. Do not round intermediate calculations. Round the monetary values to the nearest cent and percentage values to two decimal places.
| Percentage of | ||
| Quality Cost Category | Total Amount | Total Quality Cost |
| Prevention | $ | % |
| Appraisal | $ | % |
| Internal failure | $ | % |
| External failure | $ | % |
Use the Excel Pareto template to construct a Pareto chart and choose the correct Pareto diagram.
The correct Pareto chart is ___ .
What suggestions would you make to management?
_____________________ (Appraisal, External failure, Internal failure, Prevention) activities appear to be keeping failure costs relatively low; however the cost of these activities can be lowered by _________________. ( Better appraisal, better prevention, faster fixing of external failure, faster fixing of internal failure).
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