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K Go Deaf manufactures high-quality speakers. Suppose Go Deaf is considering spending the following amounts on a new quality program: Data table Additional 20
K Go Deaf manufactures high-quality speakers. Suppose Go Deaf is considering spending the following amounts on a new quality program: Data table Additional 20 minutes of testing for each speaker.... Negotiating with and training suppliers to obtain higher-quality materials and on-time delivery... Redesigning the speakers to make them easier to manufacture.... 604,000 300,600 $ 1,409,000 Go Deaf expects this quality program to save costs as follows: Data table Reduced warranty repair costs. Avoid inspection of raw materials..... $ 206,000 $ 400,000 Rework avoided because of fewer defective units........ $ 651,000 It also expects this program to avoid lost profits from the following: Data table Lost sales due to disappointed customers........ $ 854,000 Lost production time due to rework.... $ 302,000 Go Deaf manufactures high-quality speakers. Suppose Go Deaf is considering spending the following amounts on a new quality program: (Click the icon to view the information.) Go Deaf expects this quality program to save costs as follows (Click the icon to view the information.) It also expects this program to avoid lost profits from the following (Click the icon to view the information) 1. Classify each of these costs into one of the four categories of quality costs (prevention, appraisal, internal failure, extemal failure). 2. Should Go Deaf implement the quality program? Give your reasons. 1. First classify each of these costs into one of the four categories of quality costs, then prepare a cost-benefit analysis of the proposed quality program based on the four categories identified. (Use a minus sign or parentheses for savings amounts) Cost (Benefit) Analysis Prevention costs: Appraisal costs: Internal failure costs: External failure costs: Net cost (benefit) from implementing quality program
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