(SOLVED) Zaccaria Srl manufactures automotive parts A major customer has just


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Zaccaria Srl manufactures automotive parts. A major customer has just given Zaccaria an edict: ‘Improve quality or no more business.’ Lorenzo Da Ponte, the controller of Zaccaria, is given the task of developing a COQ programme. He seeks your advice on classifying each of items (a) to (g) as (i) a prevention cost, (ii) an appraisal cost, (iii) an internal failure cost, or (iv) an external failure cost.
a. Cost of inspecting products on the production line by Zaccaria quality inspectors.
b. Payment of travel costs for a Zaccaria customer representative to meet a customer who detected defective products.
c. Costs of reworking defective parts detected by Zaccaria’s quality-assurance group.
d. Labour cost of the product designer at Zaccaria whose task is to design components that will not break under extreme temperature variations.
e. Cost of automotive parts returned by customers.
f. Seminar costs for ‘Supplier Day’, a programme aimed at communicating to suppliers the new quality requirements for purchased components.
g. Costs of spoiled parts.
Required
1. Classify the seven individual cost items into one of the four categories of prevention, appraisal, internal failure or external failure.
2. Give two examples of non-financial performance measures Zaccaria could monitor as part of a total-quality-control effort.

Answer

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