Fireplace Fixtures $($FF$)$ has a standard manufacturing $$line$$ layout in its plant. To improve

quality and efficiency FF is considering a move to cellular manufacturing layout and has the

following information:

Current

Layout

Cellular

Layout

Total annual sales $ $900,000$ $ $1,100,000$

Quality costs $($as a $\%$ of sales$)$:

Employee training $3\%7\%$

Rework $12\%5\%$

Warranties $15\%4\%$

Work$-$in$-$Process Inventory $ $400,000$ $ $140,000$

Inventory carrying costs are estimated at $8\mathrm{.}0\%$ per year. The cost to implement the cellular layout is

$$300,000.$

What is the net cost$/$benefit of moving to the cellular layout?