A Company Is Considering Spending the Following on a New

question 118

Essay

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

---

Definitions:

Alcohol

A psychoactive substance found in drinks like beer, wine, and spirits, known for its effects on consciousness and behavior.

Substance Use

The consumption of drugs or other chemicals that affect the mind or body, which can range from moderation to dependency.

Romantic Relationships

Emotional and physical affiliations between individuals that often involve love, intimacy, or strong emotional bonds.

Predictors

Variables or indicators that are used to forecast or anticipate future events or outcomes based on current or past data.