Classify costs and make a quality-initiative decision (Learning Objective 5)

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

Chihooli expects the new program to save costs through the following:

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

Strength-testing one item from each batch of panels................ $65,000 Training employees in TQM..... 30,000 Training suppliers in TQM..... 40,000 Identifying preferred suppliers who commit to on-time delivery of perfect quality materials......... 60,000