EBK OM
6th Edition
ISBN: 9781305888210
Author: Collier
Publisher: YUZU
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Chapter 16, Problem 3CSQD
Summary Introduction
Case Summary: U.S. NHTSA tends to independently test approx 2,400 tires to avoid accidents. Poor quality tires can costs millions to the manufacturer due to law suits and liability claims. Thus, G.T. and R. Company started testing its tires for severe road conditions to avoid any such costs.
Interpretation: To provide two examples for prevention, appraisal, internal and external failure costs.
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- With reference to the Total Cost of Quality, there are four (4) major cost categories:Prevention, Appraisal, Internal Failure and External Failure.a) Briefly explain each of the appraisal cost-of-quality category.arrow_forwardWith reference to the Total Cost of Quality, there are four (4) major cost categories:Prevention, Appraisal, Internal Failure and External Failure.a) Briefly explain the internal failure cost-of-quality category.arrow_forwardThe following table lists all costs of quality incurred by Sam's Surf Shop last year. Annual inspection costs Annual cost of scrap materials Annual rework cost $ 247,000 456,000 204,679 626,000 1,886,000 664,000 Annual cost of quality training Annual warranty cost Annual testing cost What was Sam's appraisal cost for quality last year? Appraisal costarrow_forward
- The following table lists all costs of quality incurred by Sam's Surf Shop last year. Annual inspection costs Annual cost of scrap materials Annual rework cost Annual cost of quality training Annual warranty cost $ 175,000 366,000 114,679 536,000 1,706,000 Annual testing cost 540,000 What was Sam's appraisal cost for quality last year?arrow_forwardWalton Company has measured its quality costs for the past two years. After the company gathers its quality cost data, it summarizes those costs using the four categories shown below: This Year Last Year $ 357,000 $ 650,000 $ 445,000 $ 545,000 $ 790,000 $1,100,000 $ 680,000 Prevention costs Appraisal costs Internal failure costs 500,000 External failure costs Required: 1. Calculate the total cost of quality last year and this year. Last Year This Year Total cost of quality $ 2,692,000 $ 2,375,000| 2. For last year, calculate the cost in each of the four categories as a percent of the total cost of quality. (Round your answers to 1 decimal place.) Last Year Prevention costs 13.3 % Appraisal costs 16.5 % Internal failure costs % External failure costs 40.9 % Total percent 70.7 %arrow_forwardThe following table lists all costs of quality incurred by Kate's shop last year. Annual inspection costs 247000 Annual cost of scrap materials 456000 Annual rework cost 204679 Annual cost of quality training 626000 Annual warranty cost 1886000 Annual testing cost 664000 What was Kate's appraisal cost for quality last year?arrow_forward
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