the changes in quality cost relationships. Though it shows a total quality cost function
consistent with the quality cost relationships described, there are some key differences.
First, control costs do not increase without limit as a robust zero-defect
state is approached. Second, control costs may increase and then decrease as the
robust state is approached. Third, failure costs can be driven to zero.
Suppose, for example, that a firm has decided to improve the quality of its material
inputs through the implementation of a supplier selection program. The objective
is to identify and use suppliers who are willing to meet certain quality standards.
As the firm works to implement this program, additional costs may be
incurred (for example, review of suppliers, communication with suppliers, contract
negotiations, and so on). And, initially, other prevention and appraisal costs may
continue at their current levels. However, once the program is fully implemented
and evidence surfaces that the failure costs are being reduced (for example, less
rework, fewer customer complaints, and fewer repairs), then the company may
decide to cut back on inspections of incoming materials, reduce the level of product
acceptance activities, and so on. The net effect is a reduction in all quality cost categories.
And quality has increased!
This example is consistent with the strategy to reduce quality costs recommended
by the American Society for Quality Control:
the changes in quality cost relationships. Though it shows a total quality cost function
consistent with the quality cost relationships described, there are some key differences.
First, control costs do not increase without limit as a robust zero-defect
state is approached. Second, control costs may increase and then decrease as the
robust state is approached. Third, failure costs can be driven to zero.
Suppose, for example, that a firm has decided to improve the quality of its material
inputs through the implementation of a supplier selection program. The objective
is to identify and use suppliers who are willing to meet certain quality standards.
As the firm works to implement this program, additional costs may be
incurred (for example, review of suppliers, communication with suppliers, contract
negotiations, and so on). And, initially, other prevention and appraisal costs may
continue at their current levels. However, once the program is fully implemented
and evidence surfaces that the failure costs are being reduced (for example, less
rework, fewer customer complaints, and fewer repairs), then the company may
decide to cut back on inspections of incoming materials, reduce the level of product
acceptance activities, and so on. The net effect is a reduction in all quality cost categories.
And quality has increased!
This example is consistent with the strategy to reduce quality costs recommended
by the American Society for Quality Control:
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