1. The Backwoods American Company produces approximately 43,773 parkas annually. The quality management program the company implemented was able to improve the average percentage of good parkas produced by 1% each year, beginning with 86% good-quality parkas in 2003. Only about 11% of poor-quality parkas could be reworked.
Compute the product yield each year from 2003 to 2007. 

     

2. Given the following annual manufacturing costs and a rework cost of 515 per parka, determine the manufacturing cost per good parka for each of the five years. Round your answers to 2 decimal places, the tolerance Is +1-0.01. 

  
Which of the following statements most closely describes the results of the quality management program over the five years?
a) Quality increased with no effect on the cost  

b) Both quality and cost increased 

c) The cost of manufacturing initially increased, but as the quality management program took effect, costs began to decrease  

d) The increased % of good quality increased product yield, thereby reducing the cost of manufacturing
 
 

Year % good-quality Product yield ** 2003 2004 2005 2006 2007