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Stage Average percentage of good quality 1 8 3 percent 2 8 8 percent 3 8 5 percent 4 9 0 percent 5 9 2

Stage Average percentage of good quality 183 percent 288 percent 385 percent 490 percent 592 percent 687 percent The cabinets are produced in weekly production runs with a product input for 400 units. The Colonial House Furniture Company has investigated the manufacturing process to identify potential improvements that would improve quality. The company has identified four alternatives, each costing $15,000, as follows. Alternative 1: Only Stage 1 quality improves to 85 percent. Alternative 2: Stage 2 quality improves to 91 percent and Stage 4 quality improves to 91 percent. All the other quality percentages remain the same as the current situation. Alternative 3: Stage 5 quality improves to 88 percent and Stage 4 quality improves to 94 percent. All the other quality percentages remain the same as the current situation. Alternative 4: Only Stage 2 quality improves to 94 percent. What is the yield if the company chooses to go with Alternative 1? What is the yield if the company chooses to go with Alternative 2? What is the yield if the company chooses to go with Alternative 3? What is the yield if the company chooses to go with Alternative 4? Which alternative would be the most cost effective?

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