The president of Circle H assigned you to perform a complete investigation to determine the causes of certain quality problems and to recommend appropriate corrective action. You have authority to talk to any other person within the company. The early stages of your investigation establish that the three reasons most often cited by customers are symptomatic of some major quality problems in the company's operations. In proceeding with the audit you decide to review all available data, which may yield indications of the root causes of these problems. Further investigation reveals that, over a recent four-month period, a procedural change was made in the order approval process. You wish to find out whether this change caused a significant difference in the amount of time required to process an order from field sales through shipping. You therefore decide to investigate this particular situation. On completion of your investigation into the problems with order processing, you determine that the change in procedures for order approval led to an increase in the amount of time required restocking goods in the customers' stores. You want to recommend corrective action for this problem, but you first do additional investigation as to why the change was made. You learn that, because of large losses on delinquent accounts receivable, the change was made to require that the credit manager approve all restock orders. This approval requirement added an average of three hours to the amount of internal processing time needed for a restock order. On review of your report, the president of Circle H takes note of administrative problems whose existence he had never suspected. To assure that corrective action will be effective and sustained, the president assigns you to take charge of the corrective action program.

What types of data would be most useful to review for clues as to why the three major customer complaints occurred?

How would you investigate whether the change in the order approval process had a significant effect on order processing time?

Given your knowledge of problems in both order processing and accounts receivable, what should you do?

Answer rating: 100% (QA)

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