Question 5 Jeans Are Us Inc. has a distribution centre in Cincinnati where it receives and breaks down bulk orders from suppliers' factories and ships out products to retail customers. Table 4: Cost Elements Amount USD ('000) 710 10 405 Cost Element Checking outbound boxes for errors Quality planning Downtime due to computer problems Incoming product inspection Customer complaints Correcting erroneous order before shipping Quality training of associates Quality Improvement projects 60 40 40 30 10 a) Identify each cost element to the appropriate quality cost category, either internal failure costs and external failure costs, prevention costs or appraisal costs. (4 marks) b) Prepare the Pareto Chart showing the different quality cost categories. (4 marks) c) The company intended to improve the non-conformance costs by implementing some systems to address the issues. Suggest two quality assurance systems or activities that the company can consider and briefly explain them. (4 marks) d) Based on the analysis in c), state which is the most critical cost item and construct a cause-and-effect diagram to address all possible related causes. (8 marks) Question 5 Jeans Are Us Inc. has a distribution centre in Cincinnati where it receives and breaks down bulk orders from suppliers' factories and ships out products to retail customers. Table 4: Cost Elements Amount USD ('000) 710 10 405 Cost Element Checking outbound boxes for errors Quality planning Downtime due to computer problems Incoming product inspection Customer complaints Correcting erroneous order before shipping Quality training of associates Quality Improvement projects 60 40 40 30 10 a) Identify each cost element to the appropriate quality cost category, either internal failure costs and external failure costs, prevention costs or appraisal costs. (4 marks) b) Prepare the Pareto Chart showing the different quality cost categories. (4 marks) c) The company intended to improve the non-conformance costs by implementing some systems to address the issues. Suggest two quality assurance systems or activities that the company can consider and briefly explain them. (4 marks) d) Based on the analysis in c), state which is the most critical cost item and construct a cause-and-effect diagram to address all possible related causes. (8 marks)