E$4-31$: Costs of Quality

Sinclair Corp. manufactures radiation$-$shielding glass panels. Suppose Sinclair is considering spending the following amounts on a new TOM program:

Strength$-$testing one item from each batch of panels..Peyention.

Training employees in TQM $q,$

Training suppliers in TQM $q,$

Identifying preferred suppliers that commit to on$-$time delivery of

$$63,000$

$$27,000$

$$39,000$

perfect quality materials $q,$

$$52,000$

Sinclair expects the new program to save costs through the following:

Avoid lost profits from lost sales due to disappointed customers $q,$

$$93,000$

Avoid rework and spoilage $q,$

$$64,000$

Avoid inspection of raw materials $q,$

$$52,000$

Avoid warranty costs $q,$

$$19,000$

Requirements

Classify each item as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.

$?.$ Should Sinclair implement the new quality program? Give your reason.