1 prepare a bar graph that reveals the trend in quality cost as a percentage of cost (time on the horizontal axis and percentages on the vertical) . comment on the message of the graph
2 prepare a bar graph for each cost category as a percentage of sales . what does this graph tell you
3 what if management would like to have the trend in relative distribution of quality costs . express this as a bar graph and comment on its significance
Solution
1 see exhibit 14.6 from exhibit 14.6 it is clear that there has been a steady downward trend in quality costs as a percentage of sales (dropping from 20 percent to 10 percent) the graph also reveals that there is still ample room for improvement
2 see exhibit 14.7 from 14.7 we can see that amd has had dramatic success in reducing internal and external failure costs . more money is being spent on prevention (the percentage has doubled) also appraisal costs have increased and then decreased , suggesting that amd is becoming more confident in its prevention initiatives
3 see exhibit 14.8 this graph reveals that failure costs have gone from 80 percent of the total quality costs (16%/20%) to 35 percent (3%/10%) whereas control costs have gone from 20 percent to 65 percent . it appears that increasing prevention costs (value added) has caused the failure costs (non value added) to decrease