Question

6. Can you name products and services that in your opinion have relatively poor quality? Relatively high quality? Are companies that provide better quality more successful? How can you tell?

8. What products have recently been recalled? Why? Check the U. S. Consumer Product Safety Commission website.

10. The following costs have been recorded

Incoming materials inspection:    20,000

Training personnel:                         40,000

Warranty                                           45,000

Process planning:                            15,000

Scrap                                                  13,000

Quality Labs                                      30,000

Rework                                              25,000

Allowances                                       10,000

Complaints                                        14,000

What are the costs of prevention, appraisal, external failure, and internal failure?

Answer 1

6. Some products with poor quality include Xiaomi mobile phones, Alfa Romeo cars and most cheap products imported from China. Poor service includes AT&T Telecom and Comcast. Products with relatively high quality include Toyota and Lexus cars.

Companies that provide better quality are not necessarily more successful. Quality is defined as adherence to specifications/expectations. Customers generally lower their expectations when they purchase a product/service at a lower price so such products might not adhere to specifications as much as high quality products and might be less reliable but customers might still use such products/services and such companies will be successful. For example AT&T might not provide the best service but the alternatives are limited so customers, even though not completely satisfied with the service might continue to use it and the company is hugely successful.

8. Honda Portable Generators - American Honda recalls portable generators due to fire and burn hazards. Consumers are advised to immediately stop using the recalled generators and contact a local authorized Honda Power Equipment service dealer to schedule a free repair. Honda has received 19 reports of fuel leaking from the fuel valve. No injuries have been reported.

10. Cost of Quality

Cost of poor quality (COPQ) is defined as the costs associated with providing poor quality products or services. There are four categories:

• Internal failure costs are costs associated with defects found before the customer receives the product or service.
• External failure costs are costs associated with defects found after the customer receives the product or service.
• Appraisal costs are costs incurred to determine the degree of conformance to quality requirements.
• Prevention costs are costs incurred to keep failure and appraisal costs to a minimum.

Incoming materials inspection - Appraisal Cost

Training personnel - Prevention Cost

Warranty - External Cost

Process planning - Appraisal Cost

Scrap - Internal Cost

Quality Labs - Appraisal Cost

Rework - Internal Cost

Allowances - External Cost

Complaints - External Cost

Hence,
Total Prevention Cost = 40,000

Total Appraisal Cost = 65,000

Total Internal Cost = 38,000

Total External Cost = 69,000