A South African fruit exporter is reviewing the quality-cost summary prepared after several consignments were rejected by overseas retailers due to bruising and inconsistent cold-chain handling. Finance has recorded only laboratory testing, inspection labour, and sampling costs in the summary. However, the quality manager argues that this quality-cost summary is incomplete because it excludes emergency replacement shipments, customer claims, lost goodwill, retraining of packhouse staff, and redesigned handling procedures. Which recommendation should procurement support to give management a more accurate view of the quality problem?

Question

Answer

Add logistics and customer-service costs, but keep them separate from the quality-cost summary.

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Add retraining and handling redesign, but exclude customer claims and goodwill losses because they occur after the sale.

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Add replacement shipments and customer claims, but exclude retraining and handling redesign because they are operational improvement expenses.

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Add failure-related and prevention-related costs because the current summary records mainly checking activities.

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A South African fruit exporter is reviewing the quality-cost summary prepared af...

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