Dream Ride produces car seats for children from newborn to 2 years old. Dream Ride's only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection.

Inspection costs $4.00 per car seat, and repairs cost $1.00 per car seat. All 225,000 car seats were inspected last year, and 8% were found to have problems with the stitching. Another 2% of the 225,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers are shipped back to Dream Ride and repaired. Shipping costs are $7.00 per car seat, and repair costs are $1.00 per car seat. Negative publicity will result in a loss of future contribution margin of $300 for each extemal failure. alizenstive torihnique 7 Ted -rement 1. What tactors oher than cest thould Dream fude consider belore changlvg inseectisn techimues? B. Hoher exthmal taiure rates mey increase the procataity of iaweats. c. Dath af me above 0. Wether of the above, caet is the orly factor Dream Fide thould cantider belone changing irapection lechnicuats Requirements 1. Identify total costs of quality by category (appraisal, internal failure, and external failure). 2. Dream Ride is concerned with the high up-front cost of inspecting all 225,000 units. Managers are considering an alternative intemal inspection plan that will cost only $1.00 per car seat inspected. During the intemal inspection, the alternative technique will detect only 5.5% of the 225,000 car seats that have stitching problems. The other 4.5% will be detected after the car seats are sold and shipped. What are the total costs of quality for the alternative technique? 3. What factors other than cost should Dream Ride consider before changing inspection techniques