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Cost of Quality

The document discusses the costs associated with quality, known as the cost of quality. It describes three types of quality costs: prevention costs to avoid defects, appraisal costs for inspection and testing, and failure costs from internal and external defects. A graph shows how implementing quality initiatives can reduce total quality costs over time by lowering failure and appraisal expenses. Juran's model illustrates that the optimal quality level balances prevention and appraisal costs against failure costs, and that continuous improvement can achieve zero defects.

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2K views7 pages

Cost of Quality

The document discusses the costs associated with quality, known as the cost of quality. It describes three types of quality costs: prevention costs to avoid defects, appraisal costs for inspection and testing, and failure costs from internal and external defects. A graph shows how implementing quality initiatives can reduce total quality costs over time by lowering failure and appraisal expenses. Juran's model illustrates that the optimal quality level balances prevention and appraisal costs against failure costs, and that continuous improvement can achieve zero defects.

Uploaded by

Sage Mode
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
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TQM- COST OF QUALITY

Quality is to continuously satisfy customers satisfaction Total Quality is to achieve quality at low cost Total Quality Management is to achieve Total Quality through everybodys participation Cost of Quality -Refers to the costs associated with providing poor quality product or service. -The sum of Failure cost, Inspection/ Appraisal cost, and Prevention cost

TQM- COST OF QUALITY

Quality Control Cost Prevention Cost-Costs incurred in the process of preventing poor quality from occurring. [Cost of preparing and implementing a quality plan] Appraisal Cost- Costs incurred in the process of uncovering defects. [Costs of testing, evaluating, and inspecting quality]

TQM- COST OF QUALITY

Quality Failure Cost External Failure Cost- Costs associated with quality problems that occur at the customer site. [Costs of failure at customer site, including returns, repairs, and recalls] Internal Failure Cost- Costs associated with discovering poor product quality before the product reaches the customer. [Costs of scrap, rework, and material losses]

TQM- SAMPLE CASE

70 0 00 Cost of Quality (US$) 60 0 00 50 0 00 40 0 00 30 0 00 20 0 00 10 0 00 0 Before


Apprai sal Prevent ive Inter nal Exter nal

Ext ernal Internal Appraisal Prevent ive

Aft er

Expect ion (aft 5 at er years)

TQM- JURANS MODEL OF OPTIMUM QUALITY COST

Total Quality Cost

Cost Per Good Unit of Product

Failure Cost

Optimum lies below


100% Quality Level.

Cost of Appraisal plus Prevention

It will take infinite


investment to reach zero defects.
100% (100% good)

0 (100% defective)

Quality Level

Jurans Model of Optimum Quality Cost (1979)

TQM- JURANS MODEL OF OPTIMUM QUALITY COST

Total Quality Cost

Cost Per Good Unit of Product

Failure Cost

Optimum quality level


equals zero defects

Cost of Appraisal plus Prevention

It can be possible to
achieve zero defects by continuous improvement- a never ending effort to totally eliminate all forms of waste.

0 (100% defective)

Quality Level

100% (100% good)

Jurans revised Model of Optimum Quality Cost (1988)

TQM- COST OF QUALITY

If we can define it- we can measure it; If we can measure it- we can analyze it; If we can analyze it- we can control it; If we can control it- we can improve it.
R.M. McNealy (1994)

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