Question 3 (20 marks) Gunz Leather and Upholstery ("GLU") is a new company that specializes in leather products and works. The management of GLU are focused on delivering high quality products and services and think this is the best strategy to gain competitive advantage. As such they want to embrace a Total Quality Management (TQM) approach at the company. They recently ventured into the upholstery of car seats. The following information relates to the most recent period for their car seats upholstery wing: Cost information Customer support cost per hour Equipment maintenance and testing per hour Cost of seats rework per car Cost of repairing seats on warranty per car Activity information Number of cars requiring seat rework Number of cars requiring seat repair on warranty Time spend on customer support Time spend on maintenance and testing of equipment Required 3.1 GLU spent N$60 000 in the most recent period reviewing its suppliers and evaluating them based on the quality of their materials. In the same period, N$375 000 was spent on idle time caused by quality issues. 3.2 Total Page 15 of 17 N$ 58 30 380 2 600 Develop a cost of quality report for GLU using the common cost of quality headings. In your view, how can the report prepared in 3.1 above help GLU to develop a TQM approach. 800 cars 650 cars 500 hours 400 hours FACULTY OF COMMERCE, MANAGEMENT AND LAW OLD CURRICULUM MODULES Marks Sub- total 16 4 20 Total 16 20

Question 3 (20 marks) Gunz Leather and Upholstery ("GLU") is a new company that specializes in leather products and works. The management of GLU are focused on delivering high quality products and services and think this is the best strategy to gain competitive advantage. As such they want to embrace a Total Quality Management (TQM) approach at the company. They recently ventured into the upholstery of car seats. The following information relates to the most recent period for their car seats upholstery wing: GLU spent N\$60 000 in the most recent period reviewing its suppliers and evaluating them based on the quality of their materials. In the same period, NS375 000 was spent on idle time caused by quality issues. Page 15 of 17 FACULTY OF COMMERCE, MANAGEMENT AND LAW OLD CURRICULUM MODULES