quality Management

QUESTION 5: (a) Quality costs can be organized into four major categories: prevention costs, appraisal costs, internal failure costs, and external failure costs. Should an organization invest heavily in appraisal or prevention costs? Explain your position. [6 marks) (b) What criterion is used to classify a failure cost as "internal" versus 'external?" [4 marks] (c) The following is a memorandum from the Managing Director of a company that produces plastic containers of all types. INTERNAL MEMORANDUM To: Quality Manager From: Managing Director Date: 28 October 2016 Subject: Quality Costs Below are the newly prepared quality costs for the last two quarters of 2016: April - June July-September K Scrap and Rework 12,500 24,200 Customer Returns/Warranty 20.300 8.200 TOTAL 32.800 32.400 In spite of agreeing to your proposal to employ inspectors from July 2016 to ir finished products inspection to 100%, you notice that overall quality costs hav. no significant change. 5/9 I look forward to receiving comments on this matter. Assuming you are the Quality Manager, what will be your comments and advice in the matter at hand? [15 marks] [Total = 25 marks] 4