Delta Plastics Case Study

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Case Questions: 1.) This particular case doesn’t really come out and say exactly what cost there are that are going into the decision process. It is when we think deeper into the case than what is given that we begin to understand different costs that are associated with this case. The two main types of cost in this case are quality control costs and quality failure costs. Within these two types of costs there are more specific costs that we can look at with this case. The first more specific types of costs that Delta Plastics was determining was a type of quality control costs called their prevention costs and appraisal costs for the new material. The prevention costs would include more developing and design costs to address Isabelle Harrison’s, director of R&D, concerns of the defects with the new material. This ties closely in with another type of quality control cost of uncovering the defects called Appraisal costs. These costs would include cost of inspections and further product testing to make sure that the new material was meeting quality standards. After the decision was made to continue to produce the “Super Plastic”, we started to see other costs start to develop. These new costs were more quality failure costs known as internal failure costs. These were costs that were caused from discovering the defects in the “Super Plastic” during production but before it reached the customer. This involved rework of items to correct the defects or scrapping the product because the item could not be corrected. These were the three specific costs associated with this case. There is a fourth costs that would be external costs. These costs occur when the customer receives a poor quality product and has to have it returned or repaired, ultimately resulting in the customer losing faith and loyalty in the company. Fortunately, this case never described

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