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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 ...

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• BEng (Hons) , Birla Institute of Technology and Science, India
• MSc (Hons) , Birla Institute of Technology and Science, India
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