Subject: Quality Engineering

Q1 (b): (CLOI) (6) At the end of year 2008. The Avnor. began to focus on its quality costs. As first step, identified the following costs audit from ccounting department related to quality for the last two years. Factors 2007 (5) 2008(8) Required Sales 10,000,000 10,000,000 Scrap 400,000 300,000 Classify the cost as Appraisal, Rework 600.000 400,000 Preventive, Internal & external Product Inspection 100,000 125.000 failure. Product Warranty 800,000 600.000 2. Compute quality cost as a percentage Quality Training 40,000 80.000 of sales for each of the two years. By Muterials Inspection 60,000 40,000 how much has profit increased because of quality improvements? Assuming that quality costs can be reduced to 2.5 percent of sales, how much additional profit is available through quality improvements (assume that sales revenues will remain the same)? 3. Prepare a quality cost report for 2008