Given the cost information in the table below:

Construct a Pareto diagram of the costs of quality and provide a verbal interpretation of the situation by making a recommendation to management.

Cost Category Cost Incoming inspection of materials 5 20,000 Testing laboratory 5 10,000 Warranty costs 5 60,000 Scrap 5 35,000 Re-work 5 30,000 Continuous Improvement Projects 5 10,000 Quality training S 50,000 Process design 5 20,000