Question

Cost of Quality. Identify the 4 primary categories of quality costs and describe the characteristics and details of each type. For which of these would your quality investment be the most effective over the long run and why?

Answer 1

Quality Cost

The cost which occurs during maintaining and finding the best possible way to increase the quality of the product is known as the quality cost. As every organization and manufacturers have a single most important objective to satisfy the needs and requirements of its customers And maintaining a proper quality is very crucial for meeting the expectations of the customers.

Let's discuss 4 primary categories of quality cost and discuss their characteristics.

• Prevention Cost: This is a type of quality cost in which the organization prevents any type of wastage that might occur during the production of the product. This is the most cost-effective quality cost in which the employees and staff members of the organization are trained in such a manner that they eliminate the wastage of any resources while production of the product.
• Appraisal Cost: This is the type of cost that occurs when the organizational management conducts tests on the product to check the quality of the product and ensuring that it meets the customer's expectations
• Internal Failure Cost: This is the type of cost that occurs when there is a product that fails to meet the expectation according to the needs and requirements or the product has to be remanufactured to improve the quality of the product
• External Failure Cost: This is the cost that arises when the manufactured product is delivered to the customer and product is rejected by them and then the organization has to replace and provide proper support and services to the customer.

For investing in proper quality cost approach is very crucial and important to ensure that the product is meeting the expectation for which they have been manufactured. The best approach is the appraisal cost as it allows the organization to be very specific towards the quality of the product and they can maintain the quality of the product by investigating and checking the product quality after each and every interval of time. This approach is very effective for a longer period of time as it creates a habit of keep checking the quality and improving them if any issues found in the process.