The production team at Schaefer Manufacturing has been working on improving quality and has been approaching the problem from the technical side (measuring defects, and so on), but also from the financial perspective. They want to develop recommendations they can sell based on the implications of profit and costs. A cost analyst who is a member of the team has been working on developing a cost of quality system. The technical team has developed a way to measure quality at the manufacturing facility, which the cost analyst plans to use. The quality measure, which the team has assigned to a variable, q. is a numerical scale from 0.1 to 10.0 , measured in increments of one-tenth. The low end of the scale, 0.1 , represents low quality and 10.0 represents "perfect" quality. Using cost estimates from quality experts and cost data, the cost analyst has estimated, statistically, both the conformance and nonconformance cost relations. Specifically, the analyst estimates that for conformance cost, the relation between conformance cost(C) and quality (q) can be written as: C=q2 The relation between nonconformance cost(N) and and quality (q) can be written as: N=100eq After working with the quality system for one year, the cost analyst revisits the relations for conformance and nonconformance costs. During the year, the quality team worked on lowering the cost of conformance, specifically reducing the prevention cost. This was accomplished by working with one of the company's vendors to improve the quality of the raw materials used. As a result of the change, the cost analyst now estimates that the relation between conformance cost (C) and quality ( C ) can be written as: C=0.5q2. The cost of nonconformance relation has not changed. 6. Within cell E3 enter the formula =IF(D3=MIN($D$3:$D$102), "Yes", "No"). Copy cell E3 and paste within the range E4:E102 7. Highlight the range A2:D102, choose Insert Line or Area Chart from the Charts group of the Insert menu, and select Line. 8. Click the chart title and type Schaefer Manufacturing - Cost of Quality as a Function of Quality as the new title. 9. Double-click the horizontal axis, within the Labels section of the Axis Options menu within the Axis Options drop-down section enter 10 in the Specify Interval Unit box of the Interval Between Labels section. 10. Click the background of the chart and drag it so that the top-left corner is located within cell F1. 11. Save your progress by choosing Save As from the Flle menu. You may now answer all questions for Assignment 1080. a. Using the two relations, develop a cost of quality diagram depicting (1) conformance cost, (2) nonconformance cost, and (3) the total cost of quality, which is the sum of the conformance cost and the nonconformance cost. b. Determine the approximate (within 0.1) quality level that minimizes the total cost of quality. The relevant data has been included within the following file: Click here to access the Assignment 10-80 Student File. Assignment Steps: 1. Download the Assignment 10-80 Student File and open it within Microsoft Excel. 2. Within cell B3 enter the formula =0.5A32. This Excel formula provides the cost of conformance by multiplying 0.5 by the square of the quality measure. 3. Within cell C3 enter the formula =100EXP(A3). This Excel formula provides the cost of nonconformance by multiplying 100 by e to the negative power of the quality measure. The EXP function is used here to raise e to the negative power of the quality measure. 4. Within cell D3 enter the formula =B3+C3. 5. Copy the range B3:D3 and paste within the range B4:D102. 6. Within cell E3 enter the formula =IF(D3=MIN($D$3$D$102), "Yes", "NC) . Copy cell E3 and paste within the range E4:E102. 7. Highlight the range A2:D102, choose Insert Line or Area Chart from the Charts group of the Insert menu, and select Line. 8. Click the chart title and type Schaefer Manufacturing - Cost of Quality as a Function of Quality as the new title. 9. Double-click the horizontal axis. within the Labels section of the Axis Ootions menu within the Axis Options droD-down The production team at Schaefer Manufacturing has been working on improving quality and has been approaching the problem from the technical side (measuring defects, and so on), but also from the financial perspective. They want to develop recommendations they can sell based on the implications of profit and costs. A cost analyst who is a member of the team has been working on developing a cost of quality system. The technical team has developed a way to measure quality at the manufacturing facility, which the cost analyst plans to use. The quality measure, which the team has assigned to a variable, q. is a numerical scale from 0.1 to 10.0 , measured in increments of one-tenth. The low end of the scale, 0.1 , represents low quality and 10.0 represents "perfect" quality. Using cost estimates from quality experts and cost data, the cost analyst has estimated, statistically, both the conformance and nonconformance cost relations. Specifically, the analyst estimates that for conformance cost, the relation between conformance cost(C) and quality (q) can be written as: C=q2 The relation between nonconformance cost(N) and and quality (q) can be written as: N=100eq After working with the quality system for one year, the cost analyst revisits the relations for conformance and nonconformance costs. During the year, the quality team worked on lowering the cost of conformance, specifically reducing the prevention cost. This was accomplished by working with one of the company's vendors to improve the quality of the raw materials used. As a result of the change, the cost analyst now estimates that the relation between conformance cost (C) and quality ( C ) can be written as: C=0.5q2. The cost of nonconformance relation has not changed. 6. Within cell E3 enter the formula =IF(D3=MIN($D$3:$D$102), "Yes", "No"). Copy cell E3 and paste within the range E4:E102 7. Highlight the range A2:D102, choose Insert Line or Area Chart from the Charts group of the Insert menu, and select Line. 8. Click the chart title and type Schaefer Manufacturing - Cost of Quality as a Function of Quality as the new title. 9. Double-click the horizontal axis, within the Labels section of the Axis Options menu within the Axis Options drop-down section enter 10 in the Specify Interval Unit box of the Interval Between Labels section. 10. Click the background of the chart and drag it so that the top-left corner is located within cell F1. 11. Save your progress by choosing Save As from the Flle menu. You may now answer all questions for Assignment 1080. a. Using the two relations, develop a cost of quality diagram depicting (1) conformance cost, (2) nonconformance cost, and (3) the total cost of quality, which is the sum of the conformance cost and the nonconformance cost. b. Determine the approximate (within 0.1) quality level that minimizes the total cost of quality. The relevant data has been included within the following file: Click here to access the Assignment 10-80 Student File. Assignment Steps: 1. Download the Assignment 10-80 Student File and open it within Microsoft Excel. 2. Within cell B3 enter the formula =0.5A32. This Excel formula provides the cost of conformance by multiplying 0.5 by the square of the quality measure. 3. Within cell C3 enter the formula =100EXP(A3). This Excel formula provides the cost of nonconformance by multiplying 100 by e to the negative power of the quality measure. The EXP function is used here to raise e to the negative power of the quality measure. 4. Within cell D3 enter the formula =B3+C3. 5. Copy the range B3:D3 and paste within the range B4:D102. 6. Within cell E3 enter the formula =IF(D3=MIN($D$3$D$102), "Yes", "NC) . Copy cell E3 and paste within the range E4:E102. 7. Highlight the range A2:D102, choose Insert Line or Area Chart from the Charts group of the Insert menu, and select Line. 8. Click the chart title and type Schaefer Manufacturing - Cost of Quality as a Function of Quality as the new title. 9. Double-click the horizontal axis. within the Labels section of the Axis Ootions menu within the Axis Options droD-down
