Question
1) TVS Logistics North Americans distribution center receives and breaks down bulk orders that come in from various suppliers' manufacturing facilities and ships out the
1) TVS Logistics North Americans distribution center receives and breaks down bulk orders that come in from various suppliers' manufacturing facilities and ships out the products to retail customers. The firms quality costs incurred in 2020 is given below.
a) Classify the various quality costs into the different quality cost categories (prevention, appraisal, internal failure, external failure).
b) Analyze the costs/costs categories and suggest which areas the firm should address first in an effort to improve their quality.
Cost Elements | Amount |
Checking outbound boxes for errors | $607,750 |
Quality planning | $10,625 |
Downtime due to conveyor/computer problems | $342,125 |
Packaging waste | $68,000 |
Incoming product inspection | $51,000 |
Customer complaint rework | $34,000 |
Correcting erroneous orders before shipping | $36,550 |
Quality training of associates | $25,925 |
Quality improvement projects | $17,425 |
Other waste | $36,125 |
Correction of typographical errors--pick tickets | $11,475 |
2) The specification for a Lindemanns stainless steel chimney liner requires a thickness of 7.0 mm 0.1 mm. The firms quality analyst determines that the liner process operates at a mean thickness of 7.03 mm with the standard deviation of the process being 0.01 mm.
a) Calculate the upper and the lower limits for the stainless steel chimney liner.
b) Calculate the Cp and Cpk for this process.
3) The Omnigroup stocks and sells Kipor generators. The firm gathered the following information from its Kathmandu office:
Demand = 19,500 units per year,
Ordering cost = $25.50 per order
Holding cost = $4.50 per unit per year.
The firm wants to calculate the:
a) EOQ for the Kipor generators.
b) Annual holding costs for the Kipor generators.
c) Annual ordering costs for the Kipor generators.
4) Rane Brake Linings gathered information for its brake lining components as presented in the table below. How would the firm classify these items according to an ABC classification system?
Initial Information | ||
Part # | Unit Cost | Annual Demand |
10 | 10 | 200 |
11 | 30 | 125 |
12 | 9 | 100 |
13 | 12 | 5000 |
14 | 50 | 195 |
15 | 6 | 300 |
16 | 100 | 70 |
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