Cost of Quality

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Assuming an agreement is made between a supplier and a customer such that the supplier must ensure that all parts are within tolerance before shipment to the customer, what is the effect on the cost of quality to the customer? Cost of quality is the cost associated with the quality of a work product. As defined by Crosby in his "Quality Is Free", Cost Of Quality (COQ) has two main components: Cost Of Conformance and *Cost Of Non-Conformance. Another view is that cost of quality is the amount of money a business loses because its product or service is not done right in the first place. From fixing a warped piece on the assembly line to having to deal with a lawsuit because of a malfunctioning machine or a badly performed service,…show more content…
Each product is different in some way from the one just made prior. There are thousands of variables that affect thousands of characteristics of a product. In an environment that is constantly changing, it may not be feasible to measure every characteristic of the product. There are no tools to detect every characteristic. What is critical is to control the important parameters of the process throughout the product life cycle. This helps to ensure that the quality is built into the product as it is manufactured. What most companies do is select a handful of characteristics considered to be important to their customer. They measure those few to ensure that they meet customer requirements. They perform their 100% inspection, and if the product passes it is shipped to the customer. They are very surprised when they get a phone call from the customer that their product ruined the customer 's lot and not only does their customer want their money back but they want to be compensated for the losses as well. At that point the quality manager will retrieve the test results from the product, which shows that the product passed all quality inspection requirements before shipment. The result is lost customers. Either way the cost will be substantial to the manufacturer. What went wrong? The 100% inspection was

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