Nonfinancial measures of quality and time.Worldwide Cell Phones (WCP) has developed a cell phone that can be used anywhere in the world (even in countries like Japan that have a relatively unique cell phone system). WCP has been receiving complaints about the phone.
For the past two years, WCP has been test marketing the phones and gathering nonfinancial information related to actual and perceived aspects of the phone€™s quality. They expect that, given the lack of competition in this market, increasing the quality of the phone will result in higher sales and thereby higher profits.
Quality data for 2012 and 2013 include the following:

REQUIRED
1. For each year, 2012 and 2013, calculate:
a. Percentage of defective units shipped.
b. Customer complaints as a percentage of units shipped.
c. Percentage of units reworked during production.
d. Manufacturing lead time as a percentage of total time from order to delivery.
2. Referring to the information computed in requirement 1, explain whether WCP€™s qualityand timeliness have improved.
3. Why would manufacturing lead time have increased while customer-response time decreased?

Transcribed Image Text:

2012 2013 Cell phones produced and shipped Number of defective units shipped Number of customer complaints Units reworked before shipping Manufacturing lead time Average customer-response time 2,000 10,000 100 150 120 15 days 30 days 400 250 700 16 days 28 days