[solved]-Problem 2 3 Operations Manager Small Kayak Canoe Manufacturer Valley Kayaks Located Pacifi Q39731294

Problem 2-3 You are the operations manager for a small kayak and canoe manufacturer (Valley Kayaks) located on the Pacific Northwest (Oregon). Lately your company has experienced product quality problems. Simply put, the kayaks that you produce occasionally have defects and require rework. Consequently, you have decided to assess the impact of introducing a total quality management (TQM) program. After discussing the potential effects with representatives from marketing, finance, accounting, and quality, you arrive at a set of estimates (contained in the following table). Top management has told you that they will accept any proposal that you come up with PROVIDED that it improves the return on assets measure by at least 15 percent. Use Figure 2.3. Category Sales Cost of goods sold Variable expenses Fixed expenses Inventory Accounts receivable Other current assets Fixed assets Current Values $ 2,000,000 $ 1,500,000 300,000 100,000 300,000 100,000 500,000 400,000 Estimated Impact of TQM 5% + improvement) 0% 8.25% – (reduction) 0% 25% – 0% 0% 0% a. Calculate ROA with changes and without changes? (Round your answers to 2 decimal places.) ROA 138.00% 7.70 % Without changes b. Would you go forward with this proposal to improve quality? Yes O No References Show transcribed image text Problem 2-3 You are the operations manager for a small kayak and canoe manufacturer (Valley Kayaks) located on the Pacific Northwest (Oregon). Lately your company has experienced product quality problems. Simply put, the kayaks that you produce occasionally have defects and require rework. Consequently, you have decided to assess the impact of introducing a total quality management (TQM) program. After discussing the potential effects with representatives from marketing, finance, accounting, and quality, you arrive at a set of estimates (contained in the following table). Top management has told you that they will accept any proposal that you come up with PROVIDED that it improves the return on assets measure by at least 15 percent. Use Figure 2.3. Category Sales Cost of goods sold Variable expenses Fixed expenses Inventory Accounts receivable Other current assets Fixed assets Current Values $ 2,000,000 $ 1,500,000 300,000 100,000 300,000 100,000 500,000 400,000 Estimated Impact of TQM 5% + improvement) 0% 8.25% – (reduction) 0% 25% – 0% 0% 0% a. Calculate ROA with changes and without changes? (Round your answers to 2 decimal places.) ROA 138.00% 7.70 % Without changes b. Would you go forward with this proposal to improve quality? Yes O No References

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Answer to Problem 2-3 You are the operations manager for a small kayak and canoe manufacturer (Valley Kayaks) located on the Pacif… . . .