Crawford Production Inc.
Memo To: John Doe – Supervisor From: Jennifer Crawford cc: Colby Crawford
Date: May 20, 2015 Re: WGU QHT1 Task 1
As an employee within this company, this memo will address the various types of costs when quality considerations are made within the company, explanations for these types of costs, and three types of costs and how they are portrayed when used with trade-offs within manufacturing the product or service.
The first type of cost when quality considerations are made are appraisal costs. Appraisal costs are the costs of activities that are designed to ensure quality or expose the defects with a product or service. Appraisal costs include, but are not limited to, inspection…show more content…
Finally, another example of external failures are payments to customers or customers who are offered discounts to help offset the defective product or service that was received by the customer.
Internal failures often happen for many different reasons including receiving defective products from vendors, having the wrong settings set on the machines used to produce the product, using equipment that is not up to the correct safety standards, as well as using the improper methods when operating the machines, carelessness of employees, and not using the proper material handling procedures set forth by the company. The costs of internal failures include loss of production time, having to scrap and rework products, having to investigate circumstances within the workplace that are costing the company money, and damage done to the equipment. Regarding rework, often times the salaries and wages of employees can be affected. With his, there are many steps and procedures that a company must undergo and figure out to be able to get to the bottom of the issues that lie within this aspect of internal failure costs.
There are many trade-offs for each of the decisions that a company makes within all three types of these cost types when quality consideration is used. If the company decides to put more time into training employees properly on operating machines and