This is an exercise in determining which expense belongs in which quality cost category and then analyzing the cost data to reveal any problems in the system. The data come from a chemical plant with annual sales of $$100$ million. Their operating budget $($manufacturing cost$)$ is $$34$ million. Analyze the data and draw conclusions about the current health of the quality system.

QUALITY COST STUDY OF XYZ CHEMICAL PLANT$19$XX $$/$MONTH $1.$ Quality planning $702.$ Vendor qualification $($supplier certification$)71503.$ Acceptance inspection and test planning $($planning for inspection$)1004.$ Process equipment design for quality $3705.$ Quality task teams $($special projects to rectify quality problems$)19406.$ Turnaround planning$$Equipment $($quality$-$related scheduled maintenance$)3307.$ Turnaround planning$$Instruments $($quality$-$related scheduled maintenance$)6508.$ Quality profiling $($determining product specs to meet customer needs$)10009.$ Quality statistics $($collection of data and analysis$)42010.$ Planning quality motivational programs $17011.$ Production engineers on quality $7012.$ Process control engineering$$QA department $27,05013.$ Process control engineering$$Engineering department $12,50014.$ Systems conformance $($audit to verify system$$s conformance$)7015.$ Design$/$development of quality measurement$/$control equipment Engineering department $740$ QA department $90016.$ Quality training $105017.$ Raw material acceptance testing $334518.$ Process testing$$Operators $13,30019.$ Review production analysis data $53020.$ Environmental testing $($as it relates to product quality$)7021.$ QA in no$.1,$ no$.2,$ lot analysis, instrument calibration, and aging checks $61,31322.$ Off$-$grade burned $330023.$ Off$-$grade blended off$-$labor $21024.$ Off$-$grade storage with interest $320025.$ Reprocessing$/$sold at reduced cost $530026.$ Partial credit issued$$Customer kept product $76027.$ Bulk returns $275028.$ Packaged returns $350029.$ Returns to other locations $420$ Mini$-$Project $1\mathrm{.}3$ A university ombudsman

Krishnamoorthi, K$.$S$.$; Pennathur, Arunkumar; Krishnamoorthi, V$.$ Ram. A First Course in Quality Engineering $($p$.42).$ CRC Press. Kindle Edition.