Question

Backwoods American Inc. produces expensive, water-repellent, down-lined parkas. The company implemented a total quality-management system in 2013. Following are quality- related accounting data that have been accumulated for the five-year period after the program's start. Years 2016 2014 2015 2017 2018 Quality costs (in thousands) Prevention Appraisal Internal failure External failure Accounting measures (in thousands) Sales Manufacturing costs 3.2 26.3 39.1 118.6 10.7 29.2 51.3 110.5 28.3 30.6 48.4 105.2 42.6 24.1 35.9 91.3 50.0 19.6 32.1 65.2 2700.6 420.9 2690.1 423.4 2705.3 424.7 2310.2 436.1 2880.7 435.5 a. C. List some examples of each of the 4 quality cost categories as related to the production of parkas. b. Using the quality cost data, speculate on what the company's quality strategy (or strategies) appears to be and what results are they obtaining from it. Compute quality-sales and quality-costs indices. What extra information can you gather from these? d. The company produces approximately 40,000 parkas annually. The quality management program was able to improve the average percentage of good parkas produced by 2% each year, beginning with 83% in 2014. Only about 20% of the parkas can be reworked by incurring in a $12 rework cost. Compute the product yield and the manufacturing cost per good parka for each year. Does this information tell you something about the quality management program? e. Compute the quality-productivity ratio (QPR) for each year.

Answer 1

Answer Pro According to give the Backwoods American Inc. Produces expensive, water - repellent, down-lined Pankas...... a The below are Some of the examples of quality Cost related to production of parkas * Quality plan for parka Rawmaterial (prevention Cost) * Parka Row material Inspection by instruments (Appraisal Cost) Rezection et Rouwmaterial not as per specification (Internal failure Cost) b) By Seeing the quality Cost dată, it look like The company quality strategy is * The increased polevention Cost every year to reduce the internal and external failure. By that at 5th year internal failure reduced to 18% external failure seduced by 55 •f and

P. 2 * The Cost of Appraisal increased initially up to 3rd year and further reduced and invested the same in prevention Cost. It also resulted good ROI (Retwer on investement) in internal and external failure. c) Quality - Sales and Quality - Cest indices ste Quality - Sales indices = sales Cost Quality Coast x 100 X100 Joly overall Cost goly sales Cost 187.2 x 100 = 7% but in 2018 9700.6 it is reduced to 5.8% * quality manufacturing indices reduced from 2014 os 44. to 37'/. by 2018.

P.3 d) Prodluck yield and Good Parka Cost I 40000 Production quantity product yield manufacturing cost for that year x procherchitys. 2014 Poduct Yield 40,000 X 83% + 420.9000 78% yield is there in 2014 * parka Cost year manufacturing Const quantity produced Dolu parka Cost 4209000 40,000 = 105 per piece x 100 QPR Ratio QPR ratio = No. of good units Quality Cost + manufacing cost 40,000 = 84, (187.2 + 9,700.6) please, Vote positively...