# A manufacturer of dolls is experiencing a significant number of errors. Specifically, out of every 1,000 dolls

## Question:

A manufacturer of dolls is experiencing a significant number of errors. Specifically, out of every **1,000** dolls there are **100** which are defective. The company makes **500,000** dolls a year and the cost to produce a doll is **$3.50**.

The doll company has decided to implement a training program to reduce mistakes. They have decided to engage a third party company to provide the training. The company **believes there will be a 95% reduction in defective dolls** for one year after the training.

The needs analysis and training evaluation will cost **2,000.00**. The training program itself will cost **5,600.00.**

The training will be delivered to **25 employees who make 30.00/h. **The program takes **5 hours and all the employees can participate at the same time**. There will be light snacks provided at a cost of **$15/per participant**.

The training will take place at the manufacturing location. Some minor administration will take place. This will be **20 hours at $15 per hour**. The cost of the **trainer to deliver the program is 100.00/hour**.

- What is the annual cost of the problem? Show the math!
- What is the proposed annual benefit of the training program?
- Assign each cost into the following categories:
- Direct
- Indirect
- Developmental
- Overhead
- Trainee compensation

- What is the total cost of the training program?

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