You have been asked by the CEO of Yukon Janitorial Supplies Ltd. (YJS) to review the costs
Question:
You have been asked by the CEO of Yukon Janitorial Supplies Ltd. (YJS) to review the costs of quality for the month of April. All amounts are in thousands (000's).
Cost Item | Amount |
Product testing | $350 |
Clean up of toxic spills within the plant | $14,200 |
Employee quality training | $200 |
Payments on lawsuits from product failures | $25,000 |
Quality Engineering | $675 |
Supplies used in testing | $500 |
Statistical Process Control | $1,750 |
Revenue | $345,000 |
Some information from a competitor, Whitehorse Cleaning Inc. (WC), has been leaked. You learn that WC’s costs of quality (as a percentage of revenue) are 0.5% on external failure, 0.8% on internal failure, 5% on appraisal and 8% on prevention.
Required:
- Prepare a cost of the quality report for April for YJS. The report should list all cost items categorized by type of quality cost, including percentages in relation to revenues for each category. (4 marks)
b.Explain to the CEO of YJS, which organization (YJS or WC) has the better approach to quality management. Provide a recommendation for quality cost improvement at YJS. (3 marks)
Expert Answer:
Answer is given below b Yukon Janitorial Supplies Ltd Cost of Quality Report For the month of April ... View the full answer
