Question

Ch. 14 Entrepreneurial Decision

 

 

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Kwami Williams and Emily Cunningham of MoringaConnect must understand manufacturing costs to effectively operate and succeed as a profitable and efficient business.

Required

1. What are the three main categories of manufacturing costs Eden must monitor and control? Provide examples of each.

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2. What are four goals of a total quality management process? How can SunSaluter use TQM to improve its business activities?

Grading rubric: 125 words minimum accurate content 90%; correct grammar and spelling 10%.

Answer 1

Manufacturing costs:

The cost of resources going directly into manufacturing is included in the manufacturing costs of a company. Overhead expenses that have to be borne to keep the factory running are also included in manufacturing costs.

Total quality Management:

TQM means managing the quality at all levels of the organization. It requires the development of a culture which has to be ingrained into all the people working for the company. Without becoming the company culture, TQM cannot be successful and the company cannot realize its intended benefits.

1.

The three main categories of manufacturing costs that E must monitor and control are as follows:

1. Input materials directly forming parts of the finished products. For example, solar panels and water filters come under this category.

2. Labor directly involved in installing the systems. For example, the salaries of the direct labor come under this category.

3. Overhead expenses to keep the factory running. For example, building insurance, depreciation, and electric supply come under this category.

2.

A total quality management (TQM) process includes the following goals:

• Reduction of waste,

• Better inventory control,

• Minimization of defects, and

• Continuous improvement in the processes.

SS can use TQM to ensure that the best quality of key raw materials, solar panels and water filters go into production as input materials. That will reduce waste throughout the production process and create systems that yield a higher quantity of electricity and clean water for users. Further, by improving the processes, the company can reduce the time and/or resources consumed in producing each unit of the products.