Question
You are assigned to determine quality costs figures and then interpret the results by answering the questions at the bottom of the table. Each cost
You are assigned to determine quality costs figures and then interpret the results by answering the questions at the bottom of the table. Each cost could be one or more of the following: % of salary, hours, and other, as indicated.
Cost Type = Internal Failure, External Failure, Prevention, Appraisal
Based on Lean Six Sigma
|
| Average Monthly salary (including benefits)= | $ 5,000 | |||||||
| Costs of Quality in IT Service Company (70 Points) | Average hourly rate (including benefits)= | $ 45 | |||||||
| You are assigned to determine quality costs figures then interpret the results by answering the questions at the bottom of the table. Each cost could be one or more of the following: % of salary, hours, and other, as indicated. | Server downtime hourly cost= | $ 1,000 | |||||||
| Month 1 | Month 2 | Total $ | |||||||
| Quality Cost Item | Type | % of Salary | Hours | $ Other | % of Salary | Hours | $ Other | ||
| Re-training as a result of internal failure | 0% | 2 | $0 | 0% | 2 | $0 | |||
| Feedback to software developer (future updates) | 0% | 6 | $0 | 0% | 20 | $0 | |||
| Development of Procedures and Instructions | 10% | 0 | $0 | 10% | 0 | $0 | |||
| Regular QA Testing | 0% | 20 | $0 | 0% | 20 | $0 | |||
| re-testing after making corrections internally | 0% | 20 | $0 | 0% | 20 | $0 | |||
| Cross-functional training | 0% | 20 | $0 | 0% | 20 | $0 | |||
| Free online webinars for new technoloigy | 0% | 20 | $0 | 0% | 20 | $0 | |||
| Preventive Maintenance on Equipment | 0% | 20 | $0 | 0% | 25 | $0 | |||
| Processing client complaints about your service | 20% | 0 | $0 | 20% | 0 | $0 | |||
| Sending emails alerts for failures | 0% | 25 | $0 | 0% | 25 | $0 | |||
| Adding mistake-proof tools after customer complaints | 0% | 25 | $0 | 0% | 20 | $0 | |||
| Subcontractor development expense | 0% | 0 | $1,200 | 0% | 0 | $1,800 | |||
| Sending a software update to client after failure | 0% | 0 | $2,000 | 0% | 0 | $2,500 | |||
| Overtime due to performaing additional testing | 0% | 60 | $0 | 0% | 30 | $0 | |||
| Time looking for client files on the cloud after complaint | 0% | 60 | $0 | 0% | 60 | $0 | |||
| Training on new software | 0% | 24 | $2,000 | 0% | 0 | $0 | |||
| Time spent in other departments (training) | 0% | 85 | $0 | 0% | 110 | $0 | |||
| Troubleshooting sever failure during work hours | 0% | 100 | $0 | 0% | 90 | $0 | |||
| Quality planning | 0% | 120 | $0 | 0% | 120 | $0 | |||
| Developing patch to fix an internal problem | 0% | 0 | $6,000 | 0% | 0 | $1,000 | |||
| Subcontracted Repair maintenance | 0% | 0 | $7,000 | 0% | 0 | $10,000 | |||
| Writing code for regular testing (by a consultant) | 0% | 0 | $7,500 | 0% | 0 | $0 | |||
| Re-installing software after internal failure | 0% | 50 | $8,000 | 0% | 60 | $0 | |||
| Internal Server unscheduled downtime | 0% | 50 | $0 | 0% | 45 | $0 | |||
| 1. Identify each cost type | |||||||||
| 2. What are the totals for each category? | |||||||||
| 3. What is the ratio of cost of nonconformance to total cost of quality? | |||||||||
| 4. What are your recommendations with regard to improvement initiatives |
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Management And Cost Accounting
Authors: Charles T. Horngren, Alnoor Bhimani, Srikant M. Datar, George Foster
1st Edition
0130805475, 978-0130805478
