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Repack Solutions, Inc. has a distribution center in Cincinnati where it receives and breaks down bulk orders from suppliers' factories, and ships out products to retail customers. Prepare a chart showing the different quality cost categories and percentages for the company's quality costs that were incurred over the past year. What suggestions would you make to management?
Cost Element Amount ($)
Checking outbound boxes for errors 710,000
Quality planning 12,000
Downtime due to conveyor/computer problems 400,000
Packaging waste 80,000
Incoming product inspection 60,000
Customer complaints rework 40,000
Correcting erroneous orders before shipping 43,000
Quality training of associates 30,000
Quality improvement projects 20,000
Other waste 42,000
Correction of typographical errors--pick tickets 13,000
Total Quality Cost 1,450,000
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