$...$

Question $2-$ Swink Chapter $2$ Questions...

hapter $2$ Questions

$($i$)$

You are the operations manager for a small kayak and canoe manufacturer $($Valley Kayaks$)$ located on the Pacific Northwest $($Oregon$).$ Lately your company has experienced product quality problems. Simply put, the kayaks that you produce occasionally have defects and'require rework. Consequently, you have decided to assess the impact of introducing a total quality management $($TQM$)$ program. After discussing the potential effects with representatives from marketing, finance, accounting, and quality, you arrive at a set of estimates $($contained in the following table$).$ Top management has told you that it will accept any proposal that you come up with, provided that it improves the re$$urn on assets measure by at least $15$ percent. Use Figure $2\mathrm{.}3.$

$\backslash$table$[[$Sales Category,Current Values,Estimated Impact of TQM$],[$Cost of goods sold,$$2,000,000,5\%+$ improvement$],[$Variable expenses,$$1,500,000,0\%],[$Fixed expenses,$$300,000,8\mathrm{.}25\%-$ reduction$],[$Inventory$,$$$100,000,0\%],[$Accounts receivable,$$300,000,25\%-$ reduction$],[$Other current assets,$$100,000,0\%],[$Fixed assets,$$500,000,0\%]]$

a$.$ Calculate ROA with changes and without changes.

b$.$ Would you go forward with this proposal to improve quality?

Required $A$

Required $B$

Calculate ROA with changes and without changes.

Note: Round your answers to $2$ decimal places.

$\backslash$table$[[,$ROA$],[$With changes,,$\%],[$Without changes,,$\%]]$

Required $A$

Required B $>$

Prev

$2$ of $2$

Next