Our first cost associated with quality is appraisal costs which includes the final inspection of our jammies, testing of zippers and buttons, and other activities intended to uncover defective products. We need to insure that we are providing safe, comfortable clothing for children. The full appraisal costs include the cost of two final product auditors at $50,000 a year and the cost of the test equipment needed for $2,000 a year. A tradeoff for this investment would result in an overall better product as well as increased customer satisfaction and an enhanced reputation for quality for a relatively small investment of $52,000 a year.
Our second cost associated with quality is prevention costs. Prevention expenses aim to prevent defects from occurring. They include costs such as training, quality control procedures, and extra attention in both the design and production phases which will decrease the probability of defective workmanship (Stevenson, William. 2008). We will employee three knowledgeable individuals in the area of safety and design to first construct our clothing at a cost of $150,000 a year. This investment will be made in an effort to be proactive against faulty designs. We will lease 10 state-of-the-art sewing machines for $20,000 a year and we will secure a preventive/emergency maintenance program with the manufactures of the machine at a cost of $2,000 a year. We will also provide professional training to the operators of the machin...
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...dling of complaints, replacements, loss of customer goodwill, and opportunity costs related to lost sales. In order to assist customers with these external failures I would like to set up a customer care call center to help the customers first hand reach solutions to the problems that they may experience and to solicit feedback for a yearly cost of $30,000. A tradeoff for these investments would be greater customer loyalty and overall a greater customer experience. With a relatively small investment of $80,000 we will have the ability to command premium prices as well as gain a greater share of the market and increase stakeholder satisfaction.
Please take some time to consider the recommendations above and let me know when you would be available to go over each of them in greater detail.
Quality Assurance Manager
Sleepy Time Jammies
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