Ryser, Inc., produces and sells computer accessories. After 18 months of declining sales, Ryser’s board of directors hired a new CEO to review the problem and make changes to the company.
Upon investigation, the new CEO found that the products of Ryser are brilliantly designed. However, the manufacturing process has been neglected, which leads to unsatisfactory product quality and product returns. To address the problem, the new CEO proposed the following actions:

1. Conduct a thorough quality audit of the existing quality control program

2. Use better software to improve the accuracy of the statistical program

3. Purchase new testing equipment

4. Conduct a quality screening and evaluation of suppliers

 The new CEO also set financial targets by referencing the quality control report of the industry leader in product quality. Ryser’s quality control report and that of the industry leader are presented below.

1. Classify each proposed activity into the cost of quality category that the activity most directly affects.
2. Identify and describe the technique the new CEO used when referencing the quality control report of the industry leader.
3. Propose two other applications of the technique identified.
4. If the new CEO wants to adjust the conformance and nonconformance costs shown in its quality control report such that the cost of each category as a percentage of total production cost is equal to that of the industry leader, what should be the adjustment of the cost of each category?
    

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Costs Ryser Rework $ 62,400 $ 66,000 Product redesign 135,200 99,000 Process improvement 52,000 198,000 Testing 26,000 92,400 Product rejection 52,000 39,600 Downtime 104,000 52,800 Statistical process control 36,400 118,800 Supplier evaluation 41,600 99,000 Inspection 57,200 105,600 Warranty 208,000 112,200 Product liability claim 156,000 92,400 Total production costs $5,200,000 $ 66,000 Sales 7,429,000 9,429,000 Industry Leader Costs Ryser Rework $ 62,400 $ 66,000 Product redesign 135,200 99,000 Process improvement 52,000 198,000 Testing 26,000 92,400 Product rejection 52,000 39,600 Downtime 104,000 52,800 Statistical process control 36,400 118,800 Supplier evaluation 41,600 99,000 Inspection 57,200 105,600 Warranty 208,000 112,200 Product liability claim 156,000 92,400 Total production costs $5,200,000 $ 66,000 Sales 7,429,000 9,429,000 Industry Leader

Answer rating: 100% (QA)

Classification of each proposed activity Rework Ryser 6600062400 3600 Product redesign Industry lead... View the full answer