Question: Case Problem 1: The Memorandum MEMORANDUM: To: Quality Manager From: Managing Director SUBJECT: Quality Costs Below are the newly prepared quality costs for the last

Case Problem 1: The Memorandum MEMORANDUM: To:

Case Problem 1: The Memorandum MEMORANDUM: To: Quality Manager From: Managing Director SUBJECT: Quality Costs Below are the newly prepared quality costs for the last two quarters: Last quarter last year First-quarter this year Scrap and Rework $15,600 $31 200 Customer returns/warranty $26 200 $10 200 $41 400 Total $41 800 In spite of agreeing to your request to employ further inspection staff from January to increase finished product inspection to 100 per cent, you will see that overall quality costs have shown no significant change. I look forward to receiving your comments on this. Discuss the issues raised by the above memorandum

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