Long$-$Range Quality Performance Report

ANSWER QUESTION $2!!!!!!!$

The long$-$range performance report compares the current actual quality costs with the costs that would be present if no poor quality existed $($a zero$-$defect state$).$ It is$,$ in effect, a listing of the non$-$value$-$added costs and reflects the potential for further savings by improving quality.

Example: The actual quality costs for Jackson, Inc. are given below for the year ended, June $30$:

Prevention costs:

Quality Training

$$120,000$

Reliability engineering

$240,000$

Total prevention costs

$$360,000$

Appraisal costs:

Materials inspection

$$126,000$

Process acceptance

$144,000$

Total appraisal costs

$$270,000$

Internal failure costs:

Scrap

$$75,000$

Rework

$150,000$

Total internal failure costs

$$225,000$

External failure costs:

Customer complaints

$$97,500$

Warranty

$247,500$

Total external failure costs

$$345,000$

Total quality costs

$$1,200,000$

At the zero$-$defect state, Jackson expects to spend $$75,000$ on quality training, $$155,000$ on reliability engineering, and $$37,500$ on process acceptance. Assume sales of $$12,000,000.$

$2.$ The report in Requirement $1$ reveals that Jackson is spending just enoughtoo muchtoo littletoo much on control activitiesfailure activitiesfailure activities. Potential savings from reaching the zero$-$defect state total $

fill in the blank $73$beb$10$af$06$efbd$\_59$

$.$