Quality Cost

Cost of Quality
1 Cost of prevention. 2 Cost of appraisal. 3 Cost of internal failures 4 Cost of external failures
Cost Of quality
4+
The costs of carrying out the companys quality functions (meeting the quality needs of the customers) are known as costs of quality. These include : 1. Market research costs of discovering the quality needs of the customers. 2. The product research & development costs of creating a product concept which will meet these quality needs. 3. The design costs of translating the product concept in to information which permits planning for manufacture. 4. The cost of manufacturing planning in order to meet required quality specifications. 5. Cost of inspection & test 6. Cost of defect prevention. 7. Cost of scrap, quality failures. 8. Cost of quality assurance. 9. Field services & such other factors attributed to the quality improvement & maintenance
9 / Mahajan / kackar
Cost Of quality contd
5+
A quality cost committee of the American society of quality control has recommended that the quality costs be defined in four-categories : 1. Cost of prevention. 2. Cost of appraisal. 3. Cost of internal failures 4. Cost of external failures
Cost Of Prevention
1.
6+
It includes the costs associated with personnel engaged in designing, implementing, & maintaining the quality system. These costs are incurred to keep failure & appraisal costs to a minimum. Maintaining the quality system includes auditing the system. These includes: Cost of quality planning: Costs associated with creating overall quality plan cost of marketresearch, & product development, inspection plan, reliability plan. Cost of documenting: Cost of preparation manuals, procedures needed to communicate these plans to all concerned.
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Cost Of Prevention contd
7+
3 Process control cost Cost associated with implementing the quality plans & rocedures to achieve fitness for use. 4. Cost of training: Cost of preparing training programmes for attaining, maintaining & improving quality performance. 5 Costs associated with preventing recurring defects: Engineering, technical & supervisory costs of preventing recurring defects. 6. Costs of investigation, analysis, & correction of causes of defects by quality control department. 7. Cost of investigation, analysis, & correction of causes of de3fects by engineering department. 8. Cost of cost-consciousness programmes.
Cost Of Appraisal
8+
1. 2. 3. 4. 5. 6. 7. 8. 9. 10.
The costs associated with the measuring, evaluating, or auditing of products, components & purchased materials to assure conformance with quality standards & performance requirements are called cost of appraisal. These consist of: Receiving or incoming test & inspection. Laboratory acceptance testing. Inspection & test. Checking labour Set up for inspection & test. Inspection & test material. Maintenance & calibration of test & inspection equipment. Quality audits. Review of test & inspection data. Evaluation of field stock & spare parts.
9-10 / Mahajan / kackar
Cost Of Internal Failures
9+
These are Costs associated with defective products, components, & materials that fail to meet quality requirements & result in manufacturing losses. Theses include: 1. Costs associated with scrap i.e. cost of material, labour & burden of non usable parts. 2. Cost of rework & repair i.e. cost of making defective parts & assemblies-good. 3. Cost of re-inspection & test after defective parts are repaired. 4. Cost associated with material review activity. 5. Cost of disposition i.e. cast associated with the efforts required to determine whether non-performing products are usable for some other work & make final disposal. 6. The costs of process yield lower than might be attainable by improved controls.
Cost Of External Failures
1. 2. 3. 4. 5.
10+
These are costs generated because of defective products being shipped to customers. These include: Cost of processing complaints from customers. Cost of service to customers who receive defective items. Cost of inspecting & repairing defective items returned by the customers. Cost of replacing the defective materials or products, Cost of concession made to customers due to sub-standard products being accepted by the customers. It includes loss in income due to down grade products for sale as seconds.
Increasing Quality Costs Rs

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Rs
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Defects found at design Stage
Defects Defects found at found design During Production Stage
Defects found Defects during assly & Testing
Defects Found at D Customers site

Quality Cost

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Quality Cost

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Cost of Quality

Cost Of quality contd

Cost Of Prevention contd

Cost Of Internal Failures

Cost Of External Failures

Increasing Quality Costs Rs

Defects found at design Stage

Defects Defects found at found design During Production Stage

Defects found Defects during assly & Testing

Defects Found at D Customers site

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