Question

Required information The following information applies to the questions displayed below AccuSound Corporation manufactures printed circuits for stereo amplifiers. A common product defect is a percent testing program can be reworked to acceptable levels if the defect is drift. However, in a recent drift" caused by failure to maintain precise heat levels during the production process. Rejects from the 100 analysis of customer complaints, Marie Allen, the assistant controller, and the quality control engineer determined that normal rework does not bring the circuits up to standard. Sampling showed that about haif of the reworked circuits will fail after extended amplifier operation. The incidence of failure in the reworked circuits is projected to be about 10 percent over five years Unfortunately, there is no way to determine which reworked circuits will fail, because testing will not detect the problem. The rework process could be changed to correct the problem, but the cost-benefit analysis for the suggested change indicates that it is not economically feasible. AccuSound's marketing analyst has indicated that this problem will have a significant impact on the company's reputation and customer satisfaction. Consequently, the board of directors would interpret this problem as having serious negative implications for the company's profitability. Allen included the meeting of the board of directors. Due to the potential adverse economic impact, Allen foilowed a standing practice of highlighting this information. After reviewing the reports to be presented, the plant manager and his staff complained to the controller that he should control his people better. "We can'tu the board with this kind of material. Tell Allen to tone that down. Maybe we can get it by the board in thi meeting and have some time to work on it. People who buy those cheap systems and play them that loud shouldn't expect them to last forever." circuit failure and rework problem in her report prepared for the upcoming quarterly

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Answer 1

1 . In order to protect the interest of the company, others in the company and herself it would be appropriate for her to mention the failure of circuit so that management or directors will not be misinformed about the problem that is almost certain to occur. It should be noted that this problem is almost certain to occur and the percentage of failed circuit board will almost be around 10% which is a mind boggling number and could seriously impair the profitability of the company in future. Thus, it would be advisable on the part of Marie Allen to include the information about the failure in he report along with her statement for recommendation to give some time to the plant manager and other ataff members to rework the problem and to come out with some solution.