A Company Is Considering Spending the Following on a New

question 104

Essay

A company is considering spending the following on a new quality improvement program:
$\begin{array}{ll}\text { Inspect raw materials } & \$ 123,000 \\\text { Reengineer to improve product quality } & 760,000 \\\text { Inspect finished goods } & 150,000 \\\text { Preventive maintenance of eouibment } & 140,000\end{array}$ The company expects this quality program to reduce costs by the following amounts:
$\begin{array}{ll}\text { Avoid lost profits due to unhappy customers } & \$ 910,000 \\\text { Fewer sales returns } & 65,000 \\\text { Decrease the cost of rework } & 155,000 \\\text { Lower warrantv costs } & 54,000\end{array}$ Group each cost under the four categories of quality management systems.Comment whether the company should undertake the quality improvement program.

---

Definitions:

Idea

A thought, concept, or notion that exists within the mind as a result of mental understanding, thinking, or creativity.

Product

Any good, service, or idea that can be offered to a market to satisfy a want or need.

Persuasive Reasoning

The process of presenting arguments and evidence that convince others to change their opinions or behaviors.

Specific Evidence

Detailed and precise information or data that supports a claim, theory, or argument.