You have read the Cost of Quality Report of Sundial, Inc. and discovered that quality costs constitute 4.2% of sales. The amount is enormous, and

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You have read the Cost of Quality Report of Sundial, Inc. and discovered that quality costs constitute 4.2% of sales. The amount is enormous, and your boss asks you to develop a set of measures to reduce it.

Sundial, Inc.
Cost of Quality Report
For the Year
	Cost of Quality	Percent of Sales ($32,000,000)
Prevention costs	$160,000	0.5%
Appraisal costs	$192,000	0.6%
Internal failure costs	$576,000	2.8%
External failure costs	$416,000	1.3%
Total cost of quality	$1,344,000	4.2%

1. How would you define the Cost of Quality? Identify the types of quality costs.
2. Provide at least three examples of each of the types of Quality Costs that Sundial, Inc. might have encountered.
3. Develop a set of measures that Sundial, Inc. has to undertake in order to reduce the cost of quality. Provide at least five measures and explain in your own words how their implementation would impact the costs of quality and Sundials performance.