Safe Joumey produces car seats for children from newborn to 2 years old. Sate Journey's only problem with its car seats was stitching in the straps. The problem can usually be detected and repaired during an internal inspection (Click the icon to view additional information) Requirement 1. Identity total costs of quality by catogory (appraisal, Intomal fallure, and external fallure.) Costs of quality Appraisal Internal failure External failure Total costs of quality Requiremont 2. Safe Journey is concerned with the high up-front cost of inspecting all 250,000 units. Managers are considering an alternative internal inspection plan that will cost only $2.00 per car seat inspected. During the internal inspection, the alternative technique will detect only 1.5% of the 250,000 car seats that have stitching problems. The other 3.5% will be detected after the car seats are sold and shipped. What are the total costs of quality for the alternative technique? Appraisal cost Internal fallure cost Out of pocket external failure cost Opportunity cost of external fallure Total cost of quality Requirement 3. What factors other than cost should Safe Joumey consider before changing inspection techniques? A. Higher external failure rates may increase the probability of lawsuits. B. There could easily be serious reputation effects if the percentage of external fallures increases significantly. This rise in external failures may lead to costs greater than $300 per failure due to lost sales. C. Both of the above. D. Neither of the above, cost is the only factor Safe Journey should consider before changing inspection techniques. requirements ment 1. Identify total costs of quality by category (appraisal, intemal failure, and external failure.) al More info failure 1 failure ests of 4 ement 2. ve interne ect only 1. ped. Wh Inspection costs $6.00 per car seat, and repairs cost $2.00 per car seat. All 250,000 car seats were inspected last year, and 3% were found to have problems with the stitching. Another 2% of the 250,000 car seats had problems with the stitching, but the internal inspection did not discover them. Defective units that were sold and shipped to customers are shipped back to Safe Journey and repaired. Shipping costs are $11.00 per car seat, and repair costs are $2.00 per car seat. Negative publicity will result in a loss of future contribution margin of $300 for each external failure. sidering an native techniq beats are sold sal cost I failure o pocket e Runity cos Print Done cost of qui Fement 3. What factors other than cost should Safe Journey consider before changing inspection techniques? Higher external failure rates may increase the probability of lawsuits There could easily be serious reputation effects if the percentage of external failures increases significantly. This rise in external failures may lead to costs greater than $300 per failure due to lost sales
