Explain cost of Quality

Question

Accepted Answer

Cost of Quality refers to the total cost incurred by a company to ensure the quality of its products or services.

Cost of Quality includes both the cost of conformance (prevention and appraisal costs) and the cost of non-conformance (internal and external failure costs).
Prevention costs are incurred to prevent defects from occurring, such as training, quality planning, and process improvement.
Appraisal costs are incurred to evaluate the quality of products or services, such as inspections, testing, and audits.
Internal failure costs are incurred when defects are detected before the product or service is delivered to the customer, such as rework, scrap, and downtime.
External failure costs are incurred when defects are detected after the product or service is delivered to the customer, such as warranty claims, customer returns, and loss of reputation.
For example, a clothing manufacturer may incur prevention costs by implementing quality control measures in the production process, appraisal costs by conducting inspections and tests on finished garments, internal failure costs by reworking defective garments, and external failure costs by handling customer returns and refunds.
The goal of managing the cost of quality is to minimize the cost of non-conformance and maximize customer satisfaction.
Effective quality management can lead to improved product reliability, reduced warranty claims, and increased customer loyalty.

Accepted Answer

Appraisal Quality and Prevention Quality

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