A company uses total quality management (TQM) and has recorded the following costs of quickly for a period.
$
Staff training 8,000
Inspection 12,000
Warranty claim 20,000
Rework of faulty items detected before delivery to customers 15,000
What would be the net benefit of spending an extra 10% on prevention cost to save 20% on external failure cost?
(a) $2,000 (b) $3,200 (c) $5,000 (d) $6,200