Calculating quality-productivity ratio
Airphone, Inc. manufactures cellular telephones at a processing cost of $47 per unit. The company produces an average of 250 phones per week and has a yield of 87% good-quality phones, resulting in 13% defective phones, all of which can be reworked. The cost of reworking a defective telephone is $16
a. Compute the quality-productivity ratio (QPR)
b. Compute the QPR if the company increased the .com/economics/production”>production rate to 320 phones per week while reducing the processing cost to $42, reducing the rework cost to $12, and increasing the product yield of good quality telephones to 94%.
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