I not sure this qn come from which chapter
so, I can't giving you a specific qn...
5b) (continued) For each of the actions provide appropriate calculations to indicate the relevant financial costs and benefits as far as possible from the information available. (You should use the results for January to March 2020 to estimate the changes in activity through improvements). i) One of the internal faults requiring units to be reworked is poor design of the casing relative to the shape of the bought in engine. It has been decided to work with the engine supplier and the casing designers to rectify this. It will involve; Casing Design engineers' work 100,000 Recalibration of production line 500,000 Additional inspection of each unit of the supplied engine when delivered from the manufacturer 10 per inspection Regular inspection and testing of the production process Annual cost 600,000 These actions could be implemented within 3 months and should result in savings each three months of reducing internal scrapped units to zero and internal reworks to 2%. ii) Another main issue identified with units returned after sale is the linkage of the drill bit to the engine which for some uses is not strong enough. It is suggested that this should be resolved by producing a "Rockblaster Plus" with more robust linkage, and a recommendation of the type of work for which a "Rockblaster Plus" should be used. There should be a clear indication that Drills which have not been used for the correct purpose will not be mended under warranty. The cost of adopting this proposal will be: 200,000 Design engineers work Introducing a separate manufacturing section for part of the Rockblaster Plus production Initial training of employees in new production 100,000,000 500,000 These actions could be implemented within 6 months and are expected to result each quarter in 5,000 sales of "Rockblaster Plus" priced at 6,000 instead of the "Rockblaster". The "Rockblaster Plus" would have variable costs of 2,200. The proposal would reduce sales units returned under warranty and replaced by 70%, reduce sales returned under warranty and repaired by 50% reduce the sales lost by poor reputation to 500 units. iii) It has also been decided to introduce a regular routine maintenance schedule, costing 800,000 quarterly which should avoid breakdowns entirely. (6 marks) c) Draw up a Report for the Board of Directors commenting on each proposal. You should indicate which should be adopted first and any concerns you have about the estimated figures. (6 Marks) 5b) (continued) For each of the actions provide appropriate calculations to indicate the relevant financial costs and benefits as far as possible from the information available. (You should use the results for January to March 2020 to estimate the changes in activity through improvements). i) One of the internal faults requiring units to be reworked is poor design of the casing relative to the shape of the bought in engine. It has been decided to work with the engine supplier and the casing designers to rectify this. It will involve; Casing Design engineers' work 100,000 Recalibration of production line 500,000 Additional inspection of each unit of the supplied engine when delivered from the manufacturer 10 per inspection Regular inspection and testing of the production process Annual cost 600,000 These actions could be implemented within 3 months and should result in savings each three months of reducing internal scrapped units to zero and internal reworks to 2%. ii) Another main issue identified with units returned after sale is the linkage of the drill bit to the engine which for some uses is not strong enough. It is suggested that this should be resolved by producing a "Rockblaster Plus" with more robust linkage, and a recommendation of the type of work for which a "Rockblaster Plus" should be used. There should be a clear indication that Drills which have not been used for the correct purpose will not be mended under warranty. The cost of adopting this proposal will be: 200,000 Design engineers work Introducing a separate manufacturing section for part of the Rockblaster Plus production Initial training of employees in new production 100,000,000 500,000 These actions could be implemented within 6 months and are expected to result each quarter in 5,000 sales of "Rockblaster Plus" priced at 6,000 instead of the "Rockblaster". The "Rockblaster Plus" would have variable costs of 2,200. The proposal would reduce sales units returned under warranty and replaced by 70%, reduce sales returned under warranty and repaired by 50% reduce the sales lost by poor reputation to 500 units. iii) It has also been decided to introduce a regular routine maintenance schedule, costing 800,000 quarterly which should avoid breakdowns entirely. (6 marks) c) Draw up a Report for the Board of Directors commenting on each proposal. You should indicate which should be adopted first and any concerns you have about the estimated figures. (6 Marks)
