Question

Exercise 14.7 Quality Definition and Quality Costs Rachel Boyce, president of a company that manufactures electronic components, has a number of questions concerning quality and quality costs. She has heard a few things about quality and has asked you to respond to the following questions. Required: 1. What does it mean to have a quality product or service? Explain how product quality and conformance are related. 2. Yesterday, my quality manager told me that we need to redefine what we mean by a detec tive product. He said that conforming to specifications ignores the cost of product variabl ity and that further reduction of product variability is a veritable gold mine-just waiting be mined. What did he mean?

Answer 1

1. Quality is to mean that the product or service has no defects and has high degree of excellence. A quality product or service usually is one that exceeds customers expectations in terms of performance, service, materials used or the ultimate product itself. A conformance is a term used to ascertain that the product or service meets the customers expectations and to ensure that it confirms that the product has attributes such as performing well, is fit to use and is reliable as well as durable. Quality of conformance is often used to test if the product meets the specifications.

2. Product variation from the standards set is a costly affair and hence reduces the revenues and profits for the company. If the company is able to cut down on the variable defective costs i.e. cost of reworks and produces will within the range of quality variation it will generate higher incomes for the business.