OPERATIONS AND SUPPLY CHAIN MANAGEMENT
9th Edition
ISBN: 9781119448037
Author: Russell
Publisher: WILEY
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Chapter 2, Problem 5P
Summary Introduction
To draw: The the
Introduction
Manufacturing cost can be defined as the cost incurred by the firm in consuming various resources in order to make different products. The manufacturing cost increases with the increase in level of production.
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The Omega Shoe Company manufactures a number of dif-ferent styles of athletic shoes. Its biggest seller is the X-Pacer running shoe. In 2008 Omega implemented a
quality-management program. The company’s shoe pro-duction for the past three years and manufacturing costs
are as follows.
Only one-quarter of the defective shoes can be reworked, at acost of $2 apiece. Compute the manufacturing cost per goodproduct for each of the three years and indicate the annual
percentage increase or decrease resulting from the quality-management program.
Year
2008 2009 2010Units produced/input 32,000 34,600 35,500Manufacturing cost $278,000 291,000 305,000Percent good quality 78% 83% 90%
Perkins Company has been experiencing lost sales and high returns recently, so they decided to undertake a comprehensive quality program. Here are factors being considered: Finished products need to be inspected before shippingEstimated cost: $45,000 Production equipment needs upgradingEstimated cost: $400,000 Perkins knows that if it undertakes this program, it will be able to reduce warranty repair costs by $25,000. They also know they will be able to avoid lost profits by retaining customers, but they cannot quantify that benefit with any degree of precision. Should Perkins go ahead with the quality program? A) Yes, they should, regardless of any other considerations. B) No, they should not. C) They should, only if the benefit of avoiding lost profits is estimated to be over $420,000. D) They should, only if the benefit of avoiding lost profits is estimated to be over $445,000.
Django Industries conducted an appraisal of all costs associated with production and found the following data.
Scheduled maintenance
$35,000
Machine downtime
$160,000
Annual equipment calibration
$39,000
Warranty exchange
$125,000
Supplier quality audits
$75,000
Equipment repair
$56,000
Customer field repairs
$97,000
Incoming material audits
$80,000
Categorize these costs into the traditional four types of quality costs. What is the cumulative percentage of the two highest categories?
a. 70.2%
b. 65.6%
c. 68.4%
d. 71.8%
Chapter 2 Solutions
OPERATIONS AND SUPPLY CHAIN MANAGEMENT
Ch. 2 - Prob. 2.1ASCCh. 2 - Prob. 3.1ASCCh. 2 - Prob. 4.1ASCCh. 2 - Prob. 5.1ASCCh. 2 - Prob. 6.1ASCCh. 2 - Prob. 7.1ASCCh. 2 - Prob. 8.1ASCCh. 2 - Prob. 9.1ASCCh. 2 - Prob. 10.1ASCCh. 2 - Prob. 11.1ASC
Ch. 2 - Prob. 13.1ASCCh. 2 - Prob. 1QCh. 2 - Prob. 2QCh. 2 - Prob. 3QCh. 2 - Prob. 4QCh. 2 - Prob. 5QCh. 2 - Prob. 6QCh. 2 - Prob. 8QCh. 2 - Prob. 9QCh. 2 - Prob. 10QCh. 2 - Prob. 12QCh. 2 - Prob. 13QCh. 2 - Prob. 14QCh. 2 - Prob. 15QCh. 2 - Prob. 17QCh. 2 - Prob. 21QCh. 2 - Prob. 22QCh. 2 - Prob. 23QCh. 2 - Prob. 24QCh. 2 - Prob. 25QCh. 2 - Prob. 26QCh. 2 - Prob. 27QCh. 2 - Prob. 28QCh. 2 - Prob. 29QCh. 2 - Prob. 30QCh. 2 - Most students live in a dormitory or apartment...Ch. 2 - Prob. 32QCh. 2 - Describe, in general, how the J.D. Power Circle...Ch. 2 - Select a product that you own (like a cell phone,...Ch. 2 - Prob. 35QCh. 2 - Prob. 36QCh. 2 - Prob. 37QCh. 2 - Prob. 38QCh. 2 - Prob. 39QCh. 2 - Prob. 40QCh. 2 - Prob. 41QCh. 2 - Prob. 42QCh. 2 - Prob. 43QCh. 2 - Prob. 44QCh. 2 - Prob. 45QCh. 2 - Prob. 47QCh. 2 - Prob. 48QCh. 2 - Prob. 49QCh. 2 - Prob. 50QCh. 2 - Prob. 51QCh. 2 - Prob. 55QCh. 2 - Prob. 56QCh. 2 - Prob. 57QCh. 2 - Prob. 60QCh. 2 - Prob. 61QCh. 2 - Prob. 67QCh. 2 - Prob. 68QCh. 2 - Prob. 1PCh. 2 - The Backwoods American company in Problem 2-1...Ch. 2 - Prob. 3PCh. 2 - In Problem 2-3, if the direct manufacturing cost...Ch. 2 - Prob. 5PCh. 2 - The Colonial House Furniture Company manufactures...Ch. 2 - Prob. 8PCh. 2 - Prob. 9PCh. 2 - Prob. 10PCh. 2 - Prob. 11PCh. 2 - Prob. 12PCh. 2 - Prob. 14PCh. 2 - Prob. 1.1CPCh. 2 - Prob. 2.1CPCh. 2 - Prob. 3.1CPCh. 2 - Prob. 3.3CPCh. 2 - Prob. 3.4CPCh. 2 - Prob. 3.5CPCh. 2 - Prob. 3.6CPCh. 2 - Prob. 3.7CPCh. 2 - Prob. 3.8CPCh. 2 - Prob. 4.1CP
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