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Quality Costs, Pricing Decisions, Market Share

Gaston Company manufactures furniture. One of its product lines is an economy$-$line kitchen table. During the last year, Gaston produced and sold $100,000$ units for $$100$ per unit. Sales of the table are on a bid basis, but Gaston has always been able to win sufficient bids using the $$100$ price. This year, however, Gaston was losing more than its share of bids. Concerned, Terrell Franklin, owner and president of the company, called a meeting of his executive committee $($Megan Johnson, marketing manager; Li Chen, quality manager; Kevin Jones, production manager; and Helen Jackson, controller$).$