Shazam Modular Manufacturers, Inc., (SMMI) makes flash memory modules for tablet computers. The data in the worksheet Prob03-07 in the Excel workbook Ch03Data.xlsx on the Student Companion website represent costs of quality that they have collected over the past year. Use Pareto analysis to investigate their quality losses and to suggest which areas they might address for a Six Sigma project.

 

Shazam Modular Manufacturers, Inc.
	QUALITY COSTS AND PERCENTAGES
	Percent	Cumulative %	Cost		Category	$Annual Loss
Customer returns	39.90%	39.90%	$99,750		Customer returns	$99,750
Rework costs	16.80%	56.70%	42,000		Inspection costs – outgoing	29,500
Workstation downtime	16.50%	73.20%	41,250		Inspection costs – incoming	12,500
Insp. – out	11.80%	85.00%	29,500		Workstation downtime	41,250
Trng/syst improve	10.00%	95.00%	25,000		Training/system improvement	25,000
Insp.– in	5.00%	100.00%	12,500		Rework costs	42,000
Total Costs			$250,000		Totals	$250,000