Store A uses the newsvendor model to manage its inventory. Demand for its product is normally distributed with a mean of 500 and
1 answer:
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Answer:
total sales are the internal failure costs is 2%
Explanation:
given data
form to reduce errors = $15,000
customer complaints = 75,000
Verifying = 30,000
Correcting errors = 60,000
Total = $180,000
sales = $3,000,000
to find out
total sales are the internal failure costs
solution
we know here that internal failture cost is express as
internal failture cost = correcting error in form ...........1
internal failture cost = $60000
and
internal failture cost as % of total cost is here as
internal failture cost to sale = .......2
internal failture cost to sale =
internal failture cost to sale = 2%
so total sales are the internal failure costs is 2%