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A multi-year study of production operations of virtually all the producers of room air conditioners in the United States and in Japan reveals a failure rate of products from the lowest quality manufacturers some 500 to 1000 times greater than that of products from the highest quality manufacturers. Quality is measured by the incidence of internal and external failures. Internal failures include all defects observed, either during fabrication or along the assembly line, before the product leaves the factory. External failures include all problems incurred in the field after the unit has been installed. Measured by either criterion, Japanese companies were far superior to the U.S. counterparts.