The following discussion took place between Harold Adams, the Garcia Industries plant supervisor, and Serena Garcia, the
Question:
The following discussion took place between Harold ‘Adams, the Garcia Industries plant supervisor, and Serena Garcia, the company president:
Harold: “Serena, I think we have some very good standards here at Garcia Industries.”
Serena: “Yes, Harold, I agree with you but I’m concerned that our standards might not be enough.
Currently, we adjust our production process if a product is not within the standards that are set for each product, but some products must be slipping through the inspection process. We have had an increase in customer complaints in the last quarter. A substantial increase!”
Harold: “Well I don't think it has anything to do with our quality assurance inspectors. Aaron and John are both very experienced and I am sure that they have not let any products pass inspection that do not meet our standards.”
Serena: “What do you think is causing the complaints then?”
Harold: “I think that customers are now expecting more from our products. Global Inc., our key competitor, has been improving its quality. Maybe customers expect the same from us.”
Serena: “We need to think of some controls we can put in place to ensure that we reduce these customer complaints, Harold. I would like to you meet with Jacqueline Gauthier, our management accountant, this week and between the two of you I would like a list of controls that we can implement at our plant to increase the quality of the products we are selling.”
Harold: “That sounds like a good plan, Serena. I’ll get back to you early next week with my report.”
Prepare a list of controls including both feedback and feedforward controls that Harold and Serena could utilize to help manage quality at Garcia Industries.
Step by Step Answer:
Accounting For Managers Interpreting Accounting Information For Decision Making
ISBN: 9781118037966
1st Canadian Edition
Authors: Paul M. Collier, Sandy M. Kizan, Eckhard Schumann