Hauschlager Corp. produces and supplies automotive manufacturers with the mechanisms used to adjust the positions of front seating units. Several competitors have recently entered the market, and management is concerned that the quality of the company’s current products may be surpassed by the quality of the new competitors’ products. The controller was asked to conduct an analysis of the efforts in January to improve product quality. His analysis generated the following costs of quality:
Training of employees
Reinsertion of rework
Sample testing of materials
Setup for testing new products
Scrap and rework
Losses caused by vendor scrap
1. Prepare a detailed analysis of the costs of quality.
2. Comment on the company’s current efforts to improve product quality.