discussion

Instructions

Case 3-Comparative Analysis of Quality Costs and Organization Sizes in the Manufacturing EnvironmentPlease review the case and respond to the following:1.    Do you think SMEs incur larger or smaller quality costs and why?2.    What do you think attributes to higher failure costs in larger organizations?3.    What do you think is the COQ in your organization?  Comment broadly even if you don't have accurate numbers.4.    Review and comment on other submissions.Other Discussion Questions1.    If you have  been involved in a benchmarking exchange, please share your experience.2.    Do you think benchmarking code of conduct is necessary? Why or why not?3.    Do you think the benefits of benchmarking out-way its costs? Why or why not?4.    Review and comment on other submissions.Cost of Quality AnalysisThe ABC Company has collected the following cost data for the year:            Receiving Inspection                $      15,232          Production Scrap                      $      32,150          Rejected Products                    $        6,200          Product Design                          $      25,422        Customer Adjustment Credit      $      85,654        Online Inspection                        $      17,248        Quality Team Meeting                $        7,540        Downgrading Products              $  1,125,328        Customer Need survey              $          3,250        Final test                                    $        25,758        Prototyping                                $        136,802  1.    Organize these cost in COQ categories and put any non-QOC data in NQ category.2.    Compute the ratio of prevention and appraisal costs to failure costs3.    Recommend strategies for reducing the Total Quality Cost.

Answer

Do you think SMEs incur larger or smaller quality costs and why?Generally, most SMEs make smaller quality costs. The costs are lower because the external failure and product recall costs of large organizations are higher than that of smaller organizations. SMEs also have a lean organization structure, which helps them to examine the cost of events that result in poor quality.What do you think attributes to higher failure costs in larger organizations?The failure costs are categorized into two internal and external costs. Internal costs are incurred because of poor product quality before it is delivered to the customer. The poor-quality results in rework and scrap costs (Rodchua, 2009). Conversely, external costs occur after a product has been delivered to the customer. They include liabili...
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