4.2 Quality of Goods & Services Practice Questions

Text 2 — Brackwell Tools Ltd

Brackwell Tools Ltd manufactures cordless drills and sanders at a factory in Derby. It uses batch production and employs 44 assembly staff. Its tools are sold to customers through DIY retailers across the UK.

During 2023 the business received a large number of complaints that the batteries in its cordless drills stopped holding their charge. Quality control at Brackwell Tools Ltd is carried out by one inspector, who tests one finished tool in every twenty. Every tool returned under warranty costs the business £28 to replace.

The operations manager, Priya Ahuja, has arranged extra training for the assembly staff. She is now considering two further changes: buying an automated battery-testing machine costing £60 000, or inspecting every finished tool before it leaves the factory.

Year	Units produced	Units returned under warranty
2023	48 000	1 920
2024	52 500	1 248

Brindlow Scooters Ltd

Brindlow Scooters Ltd makes children's scooters in Sheffield and sells them to toy and sports retailers for £65 each. It uses flow production, with each of its 70 employees completing one task on the production line.

Four inspectors test every scooter at the end of the line. Scooters that fail are repaired at a cost of £18 each. Brindlow Scooters Ltd gives retailers a full refund for any scooter returned by a customer within a year. Retailers have complained about the number of returns, and a review website rates the scooters 2.9 out of 5. One large retailer has warned that it will stop stocking the scooters unless returns fall.

The operations director wants to replace the final inspection with quality assurance. Every employee would be trained to check their own work and the work passed to them, and to stop the line as soon as a fault is found. Training would cost £40 000. The four inspectors would move to other jobs in the business. Some employees have said they do not want extra responsibility without extra pay.

Table 1 Production and quality data

	2023	2024
Scooters produced	42 000	48 000
Scooters failing the final inspection	2 100	2 880
Scooters returned by customers	900	1 200

Calvera Lighting plc

Calvera Lighting plc designs and makes LED light fittings in factories in Portugal and Vietnam. It uses flow production to make about 200 000 fittings a month, which are sold to electrical retailers and builders' merchants in 30 countries at an average price of £18 each.

At the end of each production line, a team of 15 inspectors gives every finished fitting a visual check before it is packed. Even so, of the 2.4 million fittings that reached retailers last year, 6% were returned as faulty. Engineers found that most faults were caused by a loose wiring connection made early in assembly, which cannot be seen once the fitting is finished. Calvera replaces every returned fitting free of charge, at a cost of £11 each.

The operations director is considering two options:

• Option 1: introduce quality assurance, so every employee checks their own work at each stage of assembly. Training all production staff would cost £350 000.
• Option 2: keep the inspectors and buy electrical testing equipment for the end of each line, costing £120 000, which would find loose connections in finished fittings.