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Calculating quality-productivity ratio

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Airphone, Inc. manufactures cellular telephones at a processing cost of $47 per unit. The company produces an average of 250 phones per week and has a yield of 87% good-quality phones, resulting in 13% defective phones, all of which can be reworked. The cost of reworking a defective telephone is $16

a. Compute the quality-productivity ratio (QPR)
b. Compute the QPR if the company increased the production rate to 320 phones per week while reducing the processing cost to $42, reducing the rework cost to $12, and increasing the product yield of good quality telephones to 94%.

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Solution describes the steps to calculate quality-productivity ratio.

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a. Compute the quality-productivity ratio (QPR)

Good quality produced=87%=250*87%=217.5
Phones that can be reworked=250*13%=32.5
Processing cost=$47 per unit
Reworking cost=$16 per unit

QPR=(Good quality ...

Solution provided by:
Lokesh Jain, MSc
Education
  • BEng (Hons) , Birla Institute of Technology and Science, India
  • MSc (Hons) , Birla Institute of Technology and Science, India
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