Clegg manufactures radiation-shielding glass panels. Suppose Clegg is considering spending the following amounts on a new TQM program:

Strength-testing one item from each batch of panels…………….. $68,000

Training employees in TQM……………………………………………… 30,000

Training suppliers in TQM ……………………………………………. 32,000

Identifying preferred suppliers who commit to

on-time delivery of perfect quality materials……………………………. 60,000

Clegg expects the new program would save costs through the following:

void lost profits from lost sales due to disappointed customers…………. $95,000

Avoid rework and spoilage……………………………………………………………. 67,000

Avoid inspection of raw materials………………………………………………….. 57,000

Avoid warranty costs …………………………………………………………………… 16,000

Requirements

1. Classify each item as a prevention cost, an appraisal cost, an internal failure cost, or an external failure cost.

2. Should Clegg implement the new quality program? Give your reason.

Clegg manufactures radiation shielding glass panels Suppose Clegg is considering spending