Cost of Quality

Question Faliha Bhd. and Naqoura Bhd. are the manufacturers and suppliers of wooden doors. Both companies are of the same size, each having generated RM1,500,000 in sales in 2016. The following are the activities performed and costs incurred by both companies during 2016: Compan Faliha Activit Naqoura Engineering time spent to simplit RM26 RM11,550 RM3,100 RM2,600 RM8,400 RM2,100RM18,900 RM6,000RM3,400 Cost of inspecting products on the production line by quality ins RM19 Scrap resulting from substandard materials undetected by the receiving personnel Rework to correct inconsistency caused by machine variabilit Costs of Maintenance costs of test equi Costs of conductin Seminar costs for "Supplier Day- to communicate with suppliers on the new quality requirements for purchased com ntive maintenance on machi RMI5,700 RM8 ity training to production RM21 RM7,350 RM8,400RM2,100 Costs of replacing defective products discovered by customers Idle time due to quality problems Opportunity cost of lost revenue resulting from unhappy customers (est RM4,700 RM19,250 RM4 RM23,100 | 1%oftotal sales 1%oftotal sales Required: a) Prepare a Cost of Quality (COQ) analysis for Faliha Bhd. and Naqoura Bhd. for 2016 (express each cost category as a percentage of total quality cost) and calculate the total (11 marks) b) Refer to your answer in requirement (a). Evaluate the performance of each company by costs of quality as a percentage of sales for the year answering the following questions: i. Which company is most likely to succeed in the competitive marketplace? Justify. ii. Which company has serious problems with its product quality? Justify (6 marks) c) Briefly define financial and non-financial measures of quality. Provide TWO examples of (4 marks) guality. How 4 marks) non-financial quality measures. d) There are two basic aspects of quality: quality of design and do these two quality aspects differ? Explain. Total: 25 marks]