Question

Clason corp. manufactures radiation- shielding glass panels. Suppose Clason is considering spending the following amounts on a new TQM program:

Strength- testing one item from each batch of panels.......................... $ 62,000
Training employees in TQM..................................................................... $ 23,000
Training suppliers in TQM........................................................................ $ 34,000
Identifying preferred suppliers that commit to
ontime delivery of perfect quality materials.............................................$ 51,000

Clason expectsthe new program to save costs through the following:
Avoid lostprofits from lost sales due to disappointed customers....................$ 85,000
Avoid rework and spoilage................................................................................$ 66,000
Avoid inspection of raw materials......................................................................$ 49,000
Avoid warranty costs..........................................................................................$ 25,000

Requirements
1.Classify each item as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.
2. Should Clason implement the new quality program? Give your reason.



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  • CreatedAugust 27, 2014
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