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Cost of quality
Basic concept: ,[object Object],Cost of poor quality is actually the cost of doing things wrong Cost of poor quality refers to the costs associated with providing poor quality product or service
Why do we need to know COQ? ,[object Object],[object Object],[object Object],[object Object],[object Object]
Hidden Failure Costs Scrap  Warranty  Rework  Decreased capacity  Increased inventory Shop and field downtime  Management time  Engineering time  Customer dissatisfaction Lost sales Lost customer trust
Cost of quality – categories  1 -   Cost of achieving good quality Prevention Costs  Appraisal Costs 2 -  Cost of poor quality Internal failure Costs  External failure Costs Quality costs fall into two main categories:
Preventive costs: ,[object Object],[object Object]
Examples of preventive costs: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],Appraisal costs:
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Examples of Appraisal costs:
[object Object],Internal failure cost
Examples of internal failure costs: ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],External failure cost
[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Examples of external failure costs:
Measuring cost of quality ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
Steps in implementing quality costs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],[object Object]
Case study: H&S motors ,[object Object],[object Object]
Key points of study: ,[object Object],[object Object],[object Object],[object Object],[object Object]
[object Object],[object Object],[object Object],[object Object],10.49 2002 12.66 2001 19.32 2000 18.58 1999 Quality sales index Year
Conclusion: When the cost of achieving good quality increases; cost of poor quality decreases automatically.
Benefits of using quality costs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

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Data Structure using C by Dr. K Adisesha .ppsx
 

Cost of quality

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  • 4. Hidden Failure Costs Scrap Warranty Rework Decreased capacity Increased inventory Shop and field downtime Management time Engineering time Customer dissatisfaction Lost sales Lost customer trust
  • 5. Cost of quality – categories 1 - Cost of achieving good quality Prevention Costs Appraisal Costs 2 - Cost of poor quality Internal failure Costs External failure Costs Quality costs fall into two main categories:
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  • 20. Conclusion: When the cost of achieving good quality increases; cost of poor quality decreases automatically.
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