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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 Preview

    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 Summary

    Solution describes the steps to calculate quality-productivity ratio.