Question: A manufacturing company is implementing Lean principles to reduce quality costs. Calculate the Cost of Quality (CoQ) components: Prevention costs are $5,000, Appraisal costs are

A manufacturing company is implementing Lean principles to reduce quality costs. Calculate the Cost of Quality (CoQ) components: Prevention costs are $5,000, Appraisal costs are $7,000, Internal Failure costs are $10,000, and External Failure costs are $15,000. Calculate the Total Cost of Quality and identify areas for improvement based on CoQ analysis.

Requirements:

  1. Calculate the Cost of Quality (CoQ).
  2. Identify areas for improvement based on CoQ analysis.
  3. Discuss how reducing CoQ aligns with Lean principles.

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