H&s Company: Overall Satisfaction
Autor: othman324 • October 4, 2015 • Term Paper • 438 Words (2 Pages) • 797 Views
Case Study
This section of the report will measure the effectiveness of quality-improvement program implemented by H&S Company over four years period. A quality-improvement program will help a company to achieve zero defects while minimizing costs. There must be trade-offs between four cost categories in order to reduce the total costs of quality over time. These four cost categories are prevention, appraisal, internal failure and external failure costs. The following case study will show how the H&S Company has been successful in implementing an effective quality-improvement program and thus reducing the total quality cost over the time.
H&S Company manufactures small motors for use in lawnmowers and garden equipment. The company has implemented a quality-improvement program in 1996 and recorded the following quality cost data and accounting measures for four years.
|
| Year |
| |
| 1996 | 1997 | 1998 | 1999 |
Quality Costs |
|
|
|
|
Prevention | 27,000 | 41,000 | 74,600 | 112,300 |
Appraisal | 155,000 | 122,500 | 113,400 | 107,000 |
Internal Failure | 386,400 | 469,200 | 347,800 | 219,100 |
External Failure | 242,000 | 196,000 | 103,500 | 106,000 |
Total | 810,400 | 828,700 | 639,300 | 544,400 |
Accounting Measures |
| |||
Sales | 4,360,000 | 4,450,000 | 5,050,000 | 5,190,000 |
Manufacturing costs | 1,760,000 | 1,810,000 | 1,880,000 | 1,890,000 |
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