Memo: Cost of Quality

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memorandum
to:james patterson, dir. of operations
from:maria jastillana
subject:cost of quality control
date:7/8/2011
cc:department heads
cost of quality
When we listen to what our customers want, we find they want Quality. Products that are designed to specifications that is free of defects. The demand for quality in today’s consumer market is high, customer loyalty is driven by quality so we need to supply products that meet demand. QUALITY CONSIDERATIONS – Creating an environment focused on supplying zero “0” defect products, a company understanding customer needs and creating that customer for life. 3 Types of Considerations

ØPrevention Cost: Creating a process that will prevents defects from occurring from the beginning. Creating and implementing quality guidelines, employee training and reoccurring training for enhancement to processes. oABC Company Quality control guidelines require all employees to go through Quality Assurance Training. ØAppraisal Cost: Creating and implementing Production Quality Control, catching defect prior to releasing products through spot checks during manufacturing. oABC Employees required following standard work guidelines to identify product that does not meet supplied specification. Not ready to ship to customer. ØFailure Cost: When product does not conform to design specifications. oInternal – When a product is identified during quality control that it is not suitable for distribution to public. Product that is scrapped, redone or reproduced. oExternal – Charges that are incurred after product is released to the public and a defect is discovered while in customer’s possession. Return, Refund or cause for liability. START UP COST

Prevention Cost|Appraisal Cost|Failure Cost|
·Creating and Development of Systems & processes·Employee Training·Creation of Technical Support·Quality Data collection and reporting|·Testing of product before, during and after production.·Acquiring...
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