Suppose that the director of a lost dogs’ home is concerned about an increase in number of adopted dogs returned to the home because of behaviour problems. When dogs are returned, the home incurs extra animal intake and adoption costs, in addition to extra costs for board, room and more training for the dogs. In addition, the director is concerned that adopting families may not want another dog because of their unhappy experience. The director views this as a quality problem and wants to improve quality in adoption services and reduce costs at the same time.

Required

(a) List the four types of quality activities presented in the chapter. What type of quality problem is the lost dogs’ home experiencing? Explain your answer.

(b) Will an ABC system help managers determine costs for their quality activities? Explain.

(c) List one new cost pool and cost driver that could be used to improve the director’s ability to analyse quality.