Page 1Problem 1- The Door Company manufactures doors. Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs. (13 points)a. Retesting of reworked productsb. Downtime due to quality problemsc. Analysis of the cause of defects in productiond. Depreciation of test equipmente. Warranty repairsf. Lost sales arising from a reputation for poor qualityg. Quality circlesh. Rework direct manufacturing labor and overheadi. Net cost of spoilagej. Technical support provided to suppliersk. Audits of the effectiveness of the quality systeml. Plant utilities in the inspection aream. Reentering data because of keypunch errorsProblem 2 -For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:Annual demand in units250Days used per year250Lead time, in days10Ordering costs$100Annual unit carrying costs$20Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs. (17 points)Question 1.1.Related to Problem 1, classify each of the given quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs.(Points : 13) Question 2.2.Related to Problem 2, determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs.(Points : 17)
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