Cost of Quality (PEV)

System

Hi there<BR><BR>Would anybody be able to explain the cost of quality to me? <BR><BR>Thanks

System

Cost of Quality (PEV)

A business can have explicit (measureable) costs of quality and implicit costs of quality.<BR>The explicit costs can be those expenses to ensure that high quality is achieved (PREVENTION COSTS)<BR>and those costs associated with quality not being achieved and extra work being required (APPRAISAL, INTERNAL FAILURE, and EXTERNAL FAILURE COSTS)<BR><BR>Most accounting systems do not expose these costs, but if they can be identified then a business can see the amount being spent on costs directly associated with quality.<BR><BR>Examples<BR>PREVENTION training staff to work effectively (and not make mistakes)<BR><BR>APPRAISAL inspecting products after production (and identifying faulty products)<BR><BR>INTERNAL FAILURE re-working products found to be sub-standard and in need of improvement to become saleable<BR><BR>EXTERNAL FAILURE sending engineers to a customer's premises to correct errors in products<BR><BR>Implicit costs of quality could be lost reputation, lost repeat business if customers do not come back because their experience last-time was bad, or recommend their friends to NOT buy.<BR><BR>I hope this is helpful<BR><BR><BR><a target=new class=ftalternatingbarlinklarge href="mailto:sandy.hood@chichester.ac.uk">sandy.hood@chichester.ac.uk</a><BR>