Olympic implemented a quality-management program

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Reference no: EM13737280

Problem 1. The Olympic Shoe Company manufactures a number of different styles of athletic shoes. Its biggest seller is the X-Pacer running shoe. In 2008 Olympic implemented a quality-management program. The company's shoe production for the past three years and manufacturing costs are as follows.

 

Year

 

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. 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

Reference no: EM13737280

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