Applying concepts of quality cost management Rodney Nance, the president of Easeley Industries, Inc., was beaming when he was reviewing the company’s quality cost report. After he had implemented a quality-control program for three years, the company’s defect rate had declined from 20 percent to 3 percent. Mr. Nance patted Christy Tucker, the production manager, on her back and said: “You have done a great job! I plan to reward you for your hard work. However, I want the defects to disappear completely before I promote you to the position of executive vice president. So, zero-defect is going to be your personal goal for the coming year.” Mrs. Tucker responded wearily, “I’m not sure that’s really a good idea.”

Required Write a memorandum to the president explaining that zero defect is not a practical policy.

L.O. 4 PROBLEMS—SERIES B