Question

In: Accounting

The federal government maintains a website devoted to providing information about product recalls. To complete this...

The federal government maintains a website devoted to providing information about product recalls. To complete this assignment, you will need to obtain information from this site as follows:

  • Go to recalls.gov.

  • Click on the Consumer Products tab at the top of the screen.

  • Click on CPSC Recalls—Home.

Page 252

In the “Search Recalls and News Alerts” search window, type “Viking range recalls gas ranges,” and click on the search icon.

Read the recall notice dated May 15, 2015.

Required

  1. Explain why the product was recalled.

  2. Who was most responsible for the problem that resulted in the recall?

  3. Who will be negatively affected by the faulty product?

  4. What are the external failure costs related to the faulty product? Describe the nature of these costs; you will not be able to identify dollar amounts.

  5. At what point in the pre-sale process could steps have been taken to prevent the faulty product from being produced and/or sold?

Solutions

Expert Solution

a)Why product was recalled?

The product being gas range ovens can turn on by themselves, posing a burn hazard to consumers,Hence were recalled.

b)Who was most responsible for the problem that resulted in the recall?

It is the responsible of the manufacturing as well the product testing teams, if the manufacturing team had made adequate research of the components placed inside the machine or if the testing team had made sufficient and appropriate test of the properties or performance of product this recall could have been avoided.

c)Who will be negatively affected by the faulty product?

The company that is manufacturing the product would be the most affected due to the faulty product this would lead to financial loss and negative brand recognition, the distributors would also suffer a loss of reputation due to sale of such faulty product. Consumers who use such product might get affected physically and mentally.  

d)What are the external failure costs related to the faulty product?

1.Loss of Future sales

2.Warranty, repair and replacement costs

3.Legal fees to defend against any lawsuits by the customer

e)At what point in the pre-sale process could steps have been taken to prevent the faulty product from being produced and/or sold?

At the point of product designing a prototype should have been build and tested extensively before going for mass production.At the point of market research the competitor's manufacturing process as well the raw materials used by them are to be analysed.At the point of procurement of raw material effort should have been made to ensure the quality of such raw material. At the point of manufacturing the company should ensure that the product complies with all the safety standards that are to be met.


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