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Pamir Company makes chairs for outside living spaces. The company has been working on improving quality over the last year and wants to evaluate
Pamir Company makes chairs for outside living spaces. The company has been working on improving quality over the last year and wants to evaluate how well it has done on costs-of-quality (COQ) measures. Here are the results: Requirements 1. Identify costs-of-quality category (prevention, appraisal, internal failure, and external failure) for each of these costs. 2. Prepare a COQ Report by calculating the costs of quality for each category and the ratio of each COQ category to revenues and total quality costs. 3. Based on the results of requirement 2, would you conclude that Pamir's quality program has been successful? Prepare a short report to present your case. Data Table - Annual COQ Report, Pamir Company 2016 2017 Supplier evaluation $ 6,500 $ 7,500 Scrap $ 7,200 $ 5,500 Warranty repair costs $ 9,950 $ 7,450 Design engineering $ 3,870 $ 6,450 Inspection $ 3,600 $ 4,800 Rework $ 8,940 $ 5,300 Total COQ $ 40,060 $ 37,000 Total Revenue $ 300,000 $ 380,000
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