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Cost-of-Quality (COQ) Report
Precision Electric Instruments manufacturers fans for mini and micro computers. As a first step to focus on quality improvements, the firm has compiled the following operating data for 2011 (in thousands):
Line inspection
$ 55
Training
120
Returns
100
Warranty repairs
68
Preventive equipment maintenance
20
Recalls
157
Design engineering
67
Scrap (net of salvage value)
30
Downtime
40
Product-testing equipment
88
Product liability insurance
Supplier evaluation
15
Rework
35
Inspection and testing of incoming materials
25
Litigation costs to defend allegation of defective products
240
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