Homework: Chapter 19 Homework Score: 0 of 1 pt XE19-31 (similar to) Save 5 of 5
ID: 2394899 • Letter: H
Question
Homework: Chapter 19 Homework Score: 0 of 1 pt XE19-31 (similar to) Save 5 of 5 (5 complete) ? HW Score: 20%, 1 of 5 pts EQuestion Help Clarke, Inc. manufactures door panels. Suppose Clarke is considering Clarke expects the new program would save costs through the following: spending the following amounts on a new total quality management (TOM)(Click the icon to view the information.) program. (Click the icon to view the information.) Read the requirements Requirement 1. Classify each cost as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost. Cost Strength-testing one item from each batch of panels Training employees in TQM Training suppliers in TQM Identifying suppliers who commit to on-time delivery of perfect-quality materials Lost profits from lost sales due to disappointed customers Rework and spoilage Inspection of raw materials Warranty costs Requirement 2. Should Clarke implement the new quality program? Give your reason. Type of Quality Cost Appraisal Prevention Prevention Prevention External failure Internal failure Appraisal External failure implement the new quality program. The cost of implementing the new program is $ should less than the costs of failing to implement the new program.Explanation / Answer
Answer to Part -1
In the given question already classified the cost as follows;-
60000
Identifying Suppliers who commit to On-Time delivery of perfect
quality materials
Answer to part -2
As per father of the concept of Total Quality Management(TQM), TQM is the process of making a permanent climate in which an organization can continously improve.
In the above situation by implementing new quality program Clark will be able to develope the climate which will help his entity to improve continously, further if we calculate then we find that if he incurres the appraisal and prevention cost then he can avoid the External Failure cost, internal failure cost and other replacable similar cost.
Like if he incur the cost of identifying the suppliers who commit on time delivery with perfect quality material of $60,000/- then he could save the inspection cost of $50,000/-.
And similarily if he incur the cost of Strength testing, training of employees in TQM and training of suppliers in TQM of amount $121,000(60,000+26,000+35,000) then he could avoid lost profits, rework and spoilage and warranty cost of amount $179,000(94,000+67,000+18,000).
By this way he would be able to save total cost of $229,000(50000+60000+26000+35000) for Inspection cost, lost profits, rework and spoilage and warranty cost respectively. In this scenerio we are able to justify that new quality program should be implemented by Clark, not just because that by spending of $181,000 he can save $229,000, and will be able to reduce cost by $48,000(229000-181000).
It may happen that even after purchasing materials from suppliers who gives on time delivery and perfect quality materials, he will have to incur a minimum inspection cost to ensure the product quality.
So main objective why Clark should implement new quality program is, that, because of old program he had lost profits due to disappointed customers which is not good for entity's future growth and financial health of the company.
By new quality program he can ensure the quality by perfect quality material purchase, training of employees, training of suppliers, so he can reduce costs of external and internal failure and can create customer satisfaction, which can be done only by a continous program.
Thus Clark should implement new quality program to create a climate in which entity can continous improve.
Cost Classification Amount Strength testing for one item for each batch of panels Appraisal cost60000
Training Employees in TQM Prevention Cost 26000 Training Suppliers in TQM Prevention Cost 35000Identifying Suppliers who commit to On-Time delivery of perfect
quality materials
Prevention Cost 60000 Lost profits from lost sales due to disappointed customers External failure 94000 Rework and Spoilage Internal Failure 67000 Inspaction of Raw Materials appraisal 50000 Warranty Costs External Failure 18000Related Questions
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