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 and analyze the results. What suggestions would you make to management?
Loan Processing
1. Run credit checks: .................... $2,675.01
2. Review documents: .................. $3,000.63
3. Make document corrections; gather additional information: ... $1,032.65
4. Prepare tickler file; review and follow up on titles, insurance,
second meetings: ..................... $155.75
5. Review all output: ..................... $2,243.62
6. Correct rejects and incorrect output: .............. $425.00
7. Reconcile incomplete collateral report: ............. $78.34
8. Handle dealer problem calls; address associate problems;
research and communicate information: ............ $2,500.00
9. Compensate for system downtime: ............. $519.01
10. Conduct training: ..................... $1,500.00
Loan Payment
1. Receive, inspect, and process payments: ........... $800.00
2. Respond to inquiries when no coupon is presented with payments: ... $829.65
Loan Payoff
1. Receive, inspect, and process payoff and release documents: ... $224.99
2. Research payoff problems: .................. $15.35