The introduction of zero defect programs questions the traditional approach of including rework costs and waste in standards.

Required:

Write a memo to the vice president of production addressing these issues. Include in your memo answers to the following:

a. Should rework cost be built into the standard specifications for materials? If not, to what account should time lost due to rework be charged? Support your view.

b. Should an allowance for waste and shrinkage be made in material quantity standards? What factors should a company consider in making this decision?