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Mercury, Incorporated, produces cell phones at Its plant in Texas. A year ago, a consumer survey ranked the company's cell phones ow in product quality.
Mercury, Incorporated, produces cell phones at Its plant in Texas. A year ago, a consumer survey ranked the company's cell phones
ow in product quality. Shocked by thls result, Jorge Gomez, Mercury's president, set up a task force to implement a formal quality
mprovement program. Included on this task force were representatlves from the Englineering. Marketing. Customer Service,
Production, and Accounting departments. After workIng together for a year, the task force prepared the quality cost report shown
below:
Mercury, Incorporated
Quality Cost Report
in thousands
Last Year This Year
Prevention costs:
Machine maintenance
Training suppliers
Quality circles
Total prevention cost
Appraisal costs:
Incoming inspection
Final testing
Total appraisal cost
Internal fallure costs:
Rework
Scrap
Total internal failure cost
External failure costs:
Warranty repairs
Custoner returns
Total external failure cost
Total quality cost
Total production cost
Required:
Expand the company's quality cost report by showing the costs in both years as percentages of both total production cost and total
quality cost.
Note: Round your percentage answers to decimal place ie should be entered as
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