At the Beginning of a Year, Sighma Solutions Company Initiated

question 103

Multiple Choice

At the beginning of a year, Sighma Solutions Company initiated a quality improvement program. The program was successful in reducing scrap and rework costs. To help assess the impact of the quality improvement program, the following data were collected for the current year: $$\begin{array} { l r } \text { Sales } & \$ 1,200,000 \\\text { Quality training } & 24,000 \\\text { Quality engineering } & 6,000 \\\text { Scrap } & 20,000 \\\text { Rework } & 18,000 \\\text { Product inspection } & 2,000 \\\text { Product warranty } & 14,000\end{array}$$ Which of the following expresses the prevention costs as a percentage of sales? (Round to two decimal places.)

• A)7.00%
• B)3.83%
• C)5.33%
• D)2.50%

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Definitions:

Low-involvement

Products or services that require minimal thought and effort from consumers before purchase due to their simplicity and low cost.

High-involvement

Refers to purchase decisions that carry a higher risk to buyers and therefore require more thought and research.

Reference Groups

Groups that people refer to when evaluating their own qualities, circumstances, attitudes, values, and behaviors.

Marketers

Marketers are professionals or companies involved in the promotion and selling of products or services, including advertising, market research, and strategy development.