OPERATIONS MANAGEMENT CONNECT AC
OPERATIONS MANAGEMENT CONNECT AC
14th Edition
ISBN: 9781264592784
Author: Stevenson
Publisher: MCG
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Chapter 9, Problem 1.1CQ
Summary Introduction

Case summary:

The case deals about the quality issues of the products in a firm. There were numerous complaints regarding the product that includes missing label, spill or mixed, under-filled, unacceptable taste, and improperly sealed. Person A has to investigate about the issues. The sample data collected from inspecting 8 frozen dinners are as follows:

OPERATIONS MANAGEMENT CONNECT AC, Chapter 9, Problem 1.1CQ

To determine: The recommendations to be made to the manager by Person A.

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Cost-of-Quality (COQ) Reporting CVI Inc. had November sales totaling $4,200,000 andincurred the following quality-related costs:[LO 17-5]Spoiled work-in-process inventory disposal $28,000Downtime, due to quality problems 24,000Field test of new computer 74,000Support of a customer complaint department 26,000Product liability insurance 18,000Quality training 12,000Re-inspection 13,000Rework (labor and overhead) 8,000New vendor verification and facilities inspection 25,000Technical support provided to vendors 4,000Equipment inspection 20,000Test and inspection of purchased parts 32,000Warranty repairs 22,000Final PDF to printerblo17029_ch17_713-774.indd 761 02/19/18 09:10 AMChapter 17 The Management and Control of Quality 761Required1. Prepare a cost-of-quality (COQ) report for November, with appropriate classifications. For each of thefour major categories in your report, present total category cost as a percentage of total COQ for theperiod and as a percentage of sales. (Round all…
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