To: Directory Quality Control
Re: Cost of Quality and Trade-Offs
The cost of quality in a manufacturing process and environment are many as you are aware. But the 3 primary costs that we should review on a more regular basis to assure we are creating the most cost effective and quality products are the following: Appraisal, Prevention and Failure, and failure costs should be looked at as internal failure and external failure.
Appraisal costs can be defined as “The cost of activities designed to ensure quality or uncover defects” (Stevenson, 2008, p.421) Trade-offs of these appraisal costs are internal costs that are incurred when we stop production of a product to check for defects in production process, material, or any other item that causes defects. The cost associated with doing these inspections is looking for defects or issues during this part of the production cycle, other costs would be the cost of stopping the production line for a period of time, cost of additional inspectors and the testing equipment they will use for these tests.
Prevention costs are another of the costs of quality and can be defined as “The cost of preventing defects from occurring” (Stevenson 2008, p.421) Prevention costs are the costs we pay to prevent defects during production of our products. Some of the ways we create these costs or trade-offs of having these within the manufacturing process is that we implement technology systems to help monitor the processes, working with our external material vendors to assure we are getting the best quality products to use and also by training our employees on how to properly use the material and machines to produce our products as well as paying more attention to detail during the design and production of our products.
The final cost of quality that we need to look at is Failure Costs, and can be defined as “ Caused by defective parts, products or by faulty services.” (Stevenson, 2008, p.421) These failure costs can
References: Stevenson, W. (2008). Operations Management (10th ed.). McGraw-Hill.