The ABC Motor Company starts production for a particular type of motor with a steel motor housing.The production process begins with 250 motors each day.The percentage of good motors produced each day averages 80% and the percentage of poor-quality motors that can be reworked is 60%.The company wants to know the daily product yield and the effect on productivity if the daily percentage of good-quality motors is increased to 90%.Compute:

(a)Yield.

(b)The percentage increase or decrease in productivity output if good-quality motors is increased to 90%.

(c)The percentage increase or decrease in productivity output if good-quality motors is increased to 90% and %R = 70%.

(d)Input if Yield is expected to be 240 motors with %G = 80% and %R = 60%

(e)Suppose that this company has a direct manufacturing cost per unit of $30, and motors that are inferior quality can be reworked for $12 per unit.Based on the computations you made above (a & b), that is, assuming %G can be increased to90%, assess the impact on the direct cost per unit of improvement in product quality.Note that product cost/unit =total manufacturing cost, including rework / divided by Yield.