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Terrordome manufactures high-quality speakers. Suppose Terrordome is considering spending the following amounts on a new quality program Click the icon to view the information) Terrordome
Terrordome manufactures high-quality speakers. Suppose Terrordome is considering spending the following amounts on a new quality program Click the icon to view the information) Terrordome expects this quality program to save costs as follows: Click the icon to view the information It also expects this program to avoid lost profits from the following: Cck the icon to view the information) 1. Classity each of these costs into one of the four categories of quality costs (prevention, appraisal, internal failure, extemal failure) 2 Should Terrordome implement the quality prog? Give your reasons. 1. First classify each of these costs into one of the four categories of quality costs, then prepare a cost-benefit analysis of the proposed quality program based on the four categories identified. (Use a missioner parentheses for savings amount Cost (Benefit) Analysis Data Table Prevention cost Appraisal costs: Additional 20 minutes of testing for each speaker 5 830,000 Negotiating with and training suppliers to obtain higher quality materials and on-time delivery... 300,100 Redesigning the speakers to make them easier to manufacture ..........$ 1405,000 intemal failure costs: Data Table External failure costs Reduced warranty repair costs $ 207.000 Avold inspection of raw materials $ 404,000 Rework avoided because of tower defective units.... 666.000 Netcost benefi) from implementing quality program Data Table Lost ales due to disappointed customers Lost production time due to rework... $ 850.000 S304.000
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