Conduct a cost of quality analysis of the data below according to the following
ID: 2384467 • Letter: C
Question
Conduct a cost of quality analysis of the data below according to the following categories: (1) Prevention (2) Appraisal (3) Internal Failure and (4) External Failure. Include results ($ amount of each category) and conclusions from the analysis.
Cost of Qualityd ata ($)
Quality manual 1,000
General inspection &layout 464,000
Local scrap
a. casting 1,299,000
b. core 361,500
Customer allowance, defective castings 52,000
New product review 10,000
Fixturing 175,000
QC Dept operations 75,000
Local repairs
a. weld 78,000
b. salvage 244,000
Outside service @ customer plant 14,000
Training 10,000
Lab analysis, process materials 103,000
Reporting (various depts.) 25,000
Failure analysis, local scrap 130,000
Failure analysis at customer 25,000
Field service 76,000
Design & development, gages 5,000
Gage calibration & maint. 24,000
Freight on returns 18,000
Returns 805,000
Process manual writing (QC) 25,000
Annual sales = $20,000,000
Describe what would be required of a specific organization to obtain a rating of 90 to 100% in one of the 7 Baldrige categories.
Explanation / Answer
Local Scrap:
a. Casting
b. Core
Local Repairs:
a. Weld
b. Salvage
Above table populates all the various Quality Control Cost items given in the problem into four different categories.
Total QC department expenses /costs= $51000 + $691000 + $2287500 + $990000= $4019500
Internal Failure Costs represent 56.91% of total QC department costs for the year, which is very high indicating poor quality of control on manufacturing process
External Failure Costs represent 24.63% of total QC department costs for the year, which is again considerably high indicating poor planning, inspection, testing and rectification of defective products.
Prevention Costs and Appraisal Costs which ideally ought to be higher in proportion to QC department total costs, are only 1.27% and 17.19% respectively on actual basis in this case.
CoQ= $4019500
Annual Sales= $20000000
Thus, CoQ as % of Annual Sales= 2.01%
Following four reuquirements for obtaining a rating of 90% to 100% in one of the seven Baldrige categories [let us take seventh category i.e. Business Results]:
Prevention Costs Appraisal Costs Internal Failure Costs External Failure Costs Quality Manual General Inspection & LayoutLocal Scrap:
a. Casting
b. Core
Customer Allowance, Defective Castings New Product Review QC Department Operations Fixturing Outside Service @ Customer Plant Training Costs Lab Analysis, Process MaterialsLocal Repairs:
a. Weld
b. Salvage
Failure Analysis at Customer Design & Develoment, Gages Reporting (Various Depts) Failure Analysis, Local Scrap Field Service Process manual writing (QC) Gage calibration & maint. Freight on returns ReturnsRelated Questions
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