Maurice Tutor
$15/per page/Negotiable
In response to intensive foreign competition, the management of Florex Company has attempted over the past year to improve the quality of its products. A statistical process control system has been installed and other steps have been taken to decrease the amount of warranty and other field costs, which have been trending upward over the past several years. Costs relating to quality and quality control over the last two years are given below:
|
Costs (in thousands) |
||||
| Â | Last Year | This Year | ||
| Â Â Inspection | $ | 750 Â Â | $ | 795 Â Â |
| Â Â Quality engineering | $ | 600 Â Â | $ | 675 Â Â |
| Â Â Depreciation of test equipment | $ | 225 Â Â | $ | 150 Â Â |
| Â Â Rework labor | $ | 1,500 Â Â | $ | 1,680 Â Â |
| Â Â Statistical process control | $ | 0 Â Â | $ | 300 Â Â |
| Â Â Cost of field servicing | $ | 1,050 Â Â | $ | 900 Â Â |
| Â Â Supplies used in testing | $ | 45 Â Â | $ | 30 Â Â |
| Â Â Systems development | $ | 660 Â Â | $ | 750 Â Â |
| Â Â Warranty repairs | $ | 3,600 Â Â | $ | 1,275 Â Â |
| Â Â Net cost of scrap | $ | 690 Â Â | $ | 1,515 Â Â |
| Â Â Product testing | $ | 1,080 Â Â | $ | 1,425Â Â Â |
| Â Â Product recalls | $ | 2,100 Â Â | $ | 825 Â Â |
| Disposal of defective products | $ | 810Â Â Â | $ |
1,305Â Â Â Â Â Â |
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