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Problem 1 - Paper Mill Cost of Quality Quality costs at a paper mill are tabulated below. a) For each cost element in the table,
Problem 1 - Paper Mill Cost of Quality Quality costs at a paper mill are tabulated below. a) For each cost element in the table, find the percentage of total cost and the cumulative percentages when cost elements are sorted from highest to lowest. b) Construct a pareto chart of the costs (bar chart sorted from highest to lowest). C) Identify the Cost of Quality (COQ) classification for each cost element (prevention, appraisal, internal failure, external failure). d) What are your conclusions and recommendations? Interpret the data in parts (a) through (c), and provide specific recommendations for quality improvement. Paper mill data: Cost Element Downtime Testing costs Rejected paper Odd lot* Inspection Customer complaints Wasted materials Quality improvement training Total Quality Cost Annual Cost $52,000 $32,000 $612,000 $62,000 $58,000 $120,000 $226,000 $24,000 $1,186,000 * Odd Lot: Paper products with minor defects, sold at a downgraded cost
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