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7115 · 4.3

Achieving quality production — practice questions

Practice and worked examples for 7115 Achieving quality production. Short previews only — attempt the full question in MarkScheme against the official scheme.

Worked example 1

A toy manufacturer relies on final inspection, rejecting 5% of dolls before shipping. Defects still reach customers via sampling gaps. Recommend a quality approach.

Show solution outline

Current QC problem: 5% scrap cost, customer defects when sample misses faults — reactive.

QA shift: Supplier quality standards, in-line checks at moulding stage, staff training — prevent defects at source.

TQM elements: Team quality circles, customer complaint analysis, Kaizen (9.3.4).

Cost–benefit: Upfront training/ISO cost vs lower scrap, fewer returns, protected brand — usually net positive for consumer goods.

Worked example 2

A furniture maker produces 10,000 chairs per month. The production cost is $50 per chair and the selling price is $80. Currently, a Quality Control (QC) team inspects finished goods. Calculate the monthly financial benefit of switching to a new Quality Assurance (QA) system using the following data:

Current QC System:

  • Defect rate found by inspectors: 8% (chairs are scrapped)
  • Monthly cost of inspection team: 4,0004,000
  • Customer return rate for defects missed by inspection: 2% of chairs sold
  • Cost per returned chair (refund + admin): 80+80 + 10 = 9090

Proposed QA System:

  • Expected defect rate (scrapped): 1%
  • Monthly cost of QA system (training, monitoring): 5,0005,000
  • Expected customer return rate: 0.5% of chairs sold
Show solution outline

To assess the financial benefit, we must calculate and compare the total monthly costs associated with quality under each system.

Step 1: Calculate Total Monthly Quality Costs for the Current QC System

  1. Units Produced: 10,000 chairs
  2. Units Scrapped: 8% of 10,000 = 800 chairs
  3. Cost of Scrap: 800 chairs × $50 (production cost) = $40,000
  4. Units Sold: 10,000 - 800 = 9,200 chairs
  5. Units Returned by Customers: 2% of 9,200 = 184 chairs
  6. Cost of Customer Returns: 184 chairs × $90 (refund + admin) = $16,560
  7. Cost of Inspection Team: **4,000∗∗4,000**
  8. Total QC Cost: $40,000 (scrap) + $16,560 (returns) + $4,000 (inspection) = $60,560

Step 2: Calculate Total Monthly Quality Costs for the Proposed QA System

  1. Units Produced: 10,000 chairs
  2. Units Scrapped: 1% of 10,000 = 100 chairs
  3. Cost of Scrap: 100 chairs × $50 (production cost) = $5,000
  4. Units Sold: 10,000 - 100 = 9,900 chairs
  5. Units Returned by Customers: 0.5% of 9,900 ≈ 50 chairs
  6. Cost of Customer Returns: 50 chairs × $90 (refund + admin) = $4,500
  7. Cost of QA System: **5,000∗∗5,000**
  8. Total QA Cost: $5,000 (scrap) + $4,500 (returns) + $5,000 (system) = $14,500

Step 3: Calculate the Net Monthly Financial Benefit

  • Monthly Savings: Total QC Cost - Total QA Cost
  • Calculation: 60,560−60,560 - 14,500 = **46,060∗∗46,060**

Conclusion: By switching to the proactive QA system, the furniture maker can expect a net financial benefit of $46,060 per month. This demonstrates that investing in prevention (QA) is significantly more cost-effective than paying for detection and failure (QC).

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