final final
Quality Cost
Introduction:
-The top management looks at every activity in the organization in the terms of return on direct and indirect in vestment. However, this dose not mean that they are looking for short-term gains only.
They don `t mind waiting for years.
Why do we need to study COQ? o Research
shows that cost of poor quality can range from 15% to
40% of the business costs o It can prioritize quality improvement actions o Cost of quality data shows how profit is affected by quality o It helps identify the redundant activities Cost of Quality o Cost
of quality (COQ) is the sum of costs incurred by an organization in preventing poor quality. There are essentially three types of Quality Cost as given below.
Prevention Costs
2. Appraisal Costs
3. Failure Costs
1.
PAF Model. o Prevention
Costs
are the planned costs incurred by an organization to ensure that no defects occur in any of the stages such as design, development, production and deliver of a product or service. They are incurred to reduce the inspection as well as the failure costs.
o Appraisal
Costs
are incurred in verifying, checking or evaluating a product or service at virous stages during manufacturing or delivering. They are incurred due to lack of confidence in the quality of the product or service either due to the incoming material or due to
o Failure
Costs
Are incurred by an organization because the product or service did not meet the expected requirements and the product had to be fixed or replaced the service had to repeated. The failure costs are due to the incurred failure of the organization to control defects in the product
Classification of Failure Costs
Internal Failure Costs
Includes costs of every failure that takes place before the product is delivered to the customers. It accrues due to detective processes. The following accounts for internal failure: o Rejected material, supplied by vendor o Rejected pieces of sub-assemblies o Rejected products at final
Introduction:
-The top management looks at every activity in the organization in the terms of return on direct and indirect in vestment. However, this dose not mean that they are looking for short-term gains only.
They don `t mind waiting for years.
Why do we need to study COQ? o Research
shows that cost of poor quality can range from 15% to
40% of the business costs o It can prioritize quality improvement actions o Cost of quality data shows how profit is affected by quality o It helps identify the redundant activities Cost of Quality o Cost
of quality (COQ) is the sum of costs incurred by an organization in preventing poor quality. There are essentially three types of Quality Cost as given below.
Prevention Costs
2. Appraisal Costs
3. Failure Costs
1.
PAF Model. o Prevention
Costs
are the planned costs incurred by an organization to ensure that no defects occur in any of the stages such as design, development, production and deliver of a product or service. They are incurred to reduce the inspection as well as the failure costs.
o Appraisal
Costs
are incurred in verifying, checking or evaluating a product or service at virous stages during manufacturing or delivering. They are incurred due to lack of confidence in the quality of the product or service either due to the incoming material or due to
o Failure
Costs
Are incurred by an organization because the product or service did not meet the expected requirements and the product had to be fixed or replaced the service had to repeated. The failure costs are due to the incurred failure of the organization to control defects in the product
Classification of Failure Costs
Internal Failure Costs
Includes costs of every failure that takes place before the product is delivered to the customers. It accrues due to detective processes. The following accounts for internal failure: o Rejected material, supplied by vendor o Rejected pieces of sub-assemblies o Rejected products at final