The Costs of Quality Are Given by the Following Equations

question 95

Short Answer

The costs of quality are given by the following equations:
Cₐ = 20D + 5000
Cp = 15000-100D
Cf = 50 × eᴰ/⁴
where:
Cₐ is the cost of appraisal,
Cp is the cost of prevention,and
Cf is the cost of failure.Note that D is the percent defectives and 0 < D < 100.What will be the failure cost if D = 2 percent?

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Definitions:

State Of Incorporation

The specific state within the United States where a corporation is registered to conduct business under its laws.

Market Value

The going rate for an asset or service to be either bought or sold in a marketplace.

Weighted-average

A method of calculating an average that accounts for the varying significance (weights) of different items in the dataset.

Common Shares

A type of equity security that represents ownership in a corporation, with holders possibly entitled to dividends and voting rights.