7/24/2019 Bus 503 Chapter 8 HW Solutions

http://slidepdf.com/reader/full/bus-503-chapter-8-hw-solutions 1/3

PROBLEM 8-39 (35 MINUTES)

1. Warranty costs E!t"rna# $a%#&r"  R"#%a'%#%ty "n%n""r%n r"*"nt%on  R"+or, at ITIs an&$act&r%n #ant %nt"rna# $a%#&r"

  Man&$act&r%n %ns"ct%on ara%sa#  Transortat%on costs to c&sto"r s%t"s "!t"rna# $a%#&r"  /&a#%ty tra%n%n $or "#oy""s r"*"nt%on

0 3. E*a#&at%on o$ 2&a#%ty costsNo. 15 No. 140

6 o$ Sa#"s 6 o$ Sa#"sSa#"s r"*"n&"

37777 ! 17 04577 ! 077

......................................................

  :877777 5577777

Pr"*"nt%onR"#%a'%#%ty "n%n""r%n

177 ;o&rs ! 157......................................................

  0:7777

0777 ;o&rs ! 157......................................................

377777

/&a#%ty tra%n%n......................................................

  35777 57777

Tota#......................................................   045777 5.436 357777 .36

<ra%sa# (%ns"ct%on)377 ;o&rs ! 57

......................................................  15777 .316

577 ;o&rs ! 57......................................................

05777 .:6

Int"rna# $a%#&r" (r"+or, at ITI)17 &n%ts ! 356 ! 1977

......................................................  17:77 0.006

077 &n%ts ! 056 ! 177......................................................

87777 1.:56

E!t"rna# $a%#&r"Warranty costs

17 &n%ts ! 476 ! 977......................................................

  177877

077 &n%ts ! 176 ! 357......................................................

4777

7/24/2019 Bus 503 Chapter 8 HW Solutions

http://slidepdf.com/reader/full/bus-503-chapter-8-hw-solutions 2/3

Transortat%on to c&sto"rs 09577 15777Tota#

......................................................  137377 0.416 00777 .:76

Tota# 2&a#%ty costs....................... 50477 17.946 :44777 8.46 

7/24/2019 Bus 503 Chapter 8 HW Solutions

http://slidepdf.com/reader/full/bus-503-chapter-8-hw-solutions 3/3

PROBLEM 8-39 (=ONTINUE>)

In?%*%?&a# 2&a#%ty costs as a 6 o$ tota# 2&a#%ty costs

No. 15 No. 140

6 o$ Tota# 6 o$ Tota#

Pr"*"nt%on@@@.. 045777 50.016 357777 43.386<ra%sa# @@@... 15777 0.856 05777 5.0:6Int"rna# $a%#&r" @. 17:77 07.076 87777 1.446E!t"rna# $a%#&r"@. 137377 0:.4:6 00777 :.16

Tota# @@@@. 50477 :44777 :. A"s t;" coany %s %n*"st%nC %ts 2&a#%ty "!"n?%t&r"s ?%$$"r"nt#y $or t;" t+o

ac;%n"s. ITI %s s"n?%n or" &-$ront on no. 140 +%t; r"s"ct to r"*"nt%on an?

ara%sa#Da#ost 496 o$ t;" tota# 2&a#%ty "!"n?%t&r"s. (T;%s $%&r" %s aro!%at"#y556 $or no. 15.) T;" o"rat%n r"s&#t %s #o+"r %nt"rna# an? "!t"rna# $a%#&r" costs an?"r;as or" %ortant #o+"r tota# 2&a#%ty costs as a "rc"nta" o$ sa#"s (8.46 $or no.140 an? 17.946 $or no. 15).

T;%s ro'#" %##&strat"s t;" "ss"nc" o$ tota# 2&a#%ty ana""nt (T/M) syst"s +;"ncoar"? +%t; con*"nt%ona# 2&a#%ty contro# roc"?&r"s. O*"ra## costs ar" #o+"r +%t;T/M +;"n coar"? aa%nst syst"s t;at $oc&s on a$t"r-t;"-$actC ?"t"ct%on an?r"+or,.

5.  PREVENTION, APPRAISAL, INTERNAL FAILURE, AND EXTERNAL FAILURE COSTS

 ARE OBSERVABLE IN THE SENSE THAT SUCH AMOUNTS CAN BE MEASURED AND

 REPORTED. WHEN INFERIOR PRODUCTS MAKE IT TO THE MARKETPLACE, CUSTOMER

 DISSATISFACTION WILL OFTEN INCREASE, RESULTING IN LOST SALES OF THE

 DEFECTIVE PRODUCT AND PERHAPS OTHER GOODS AS WELL. THE “COST” OF THESE

 LOST SALES IS AN OPPORTUNITY COST—A “HIDDEN” COST THAT IS VERY DIFFICULT TO

 MEASURE.