The Omega Shoe Company manufactures a number of different styles of athletic shoes. Its biggest seller is the X Pacer running shoe. In 2008 Omega implemented a quality management program
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Description
Problem 1. The Omega Shoe Company manufactures a number of different styles of athletic shoes. Its biggest seller is the X-Pacer running shoe. In 2008 Omega implemented a quality-management program. The company's shoe production for the past three years and manufacturing costs are as follows.
2008
2009
2010
Units produced/input
32,000
34,600
35,500
Manufacturing cost
278,000
291,000
305,000
Percent good quality
78%
83%
90%Only one-quarter of the defective shoes can be reworked, at a cost of 2 apiece.
Question: Compute the manufacturing cost per good product for each of the three years and indicate the annual percentage increase or decrease resulting from the quality-management program.
Solution
Manufacturing cost per good product
Year 2008
Rework...
4.455
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Published On:
12/12/2014
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