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    Cost of Quality (Coq)

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    Abu Naser
    Cost of quality (COQ) is a methodology that allows organizations to determine how resources are used for quality-related activities like prevention, appraisal, and failures. These activities incur costs for preventing poor quality, evaluating quality, and resulting from internal and external failures. Quality costs are divided into prevention costs for avoiding problems, appraisal costs for measuring quality, internal failure costs for pre-delivery defects, and external failure costs for post-delivery customer defects.

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    Cost of Quality (Coq)

    Uploaded by

    Abu Naser
    124 views2 pages
    Cost of quality (COQ) is a methodology that allows organizations to determine how resources are used for quality-related activities like prevention, appraisal, and failures. These activities incur costs for preventing poor quality, evaluating quality, and resulting from internal and external failures. Quality costs are divided into prevention costs for avoiding problems, appraisal costs for measuring quality, internal failure costs for pre-delivery defects, and external failure costs for post-delivery customer defects.

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    Cost of Quality

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    Cost of quality (COQ) is a methodology that allows organizations to determine how resources are used for quality-related activities like prevention, appraisal, and failures. These activities incur costs for preventing poor quality, evaluating quality, and resulting from internal and external failures. Quality costs are divided into prevention costs for avoiding problems, appraisal costs for measuring quality, internal failure costs for pre-delivery defects, and external failure costs for post-delivery customer defects.

    Copyright:

    © All Rights Reserved
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    124 views2 pages

    Cost of Quality (Coq)

    Uploaded by

    Abu Naser
    Cost of quality (COQ) is a methodology that allows organizations to determine how resources are used for quality-related activities like prevention, appraisal, and failures. These activities incur costs for preventing poor quality, evaluating quality, and resulting from internal and external failures. Quality costs are divided into prevention costs for avoiding problems, appraisal costs for measuring quality, internal failure costs for pre-delivery defects, and external failure costs for post-delivery customer defects.

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    © All Rights Reserved
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    COST OF QUALITY (COQ)

    Quality Glossary Definition: Cost of Quality

    Cost of quality (COQ) is defined as a methodology that allows an organization to determine


    the extent to which its resources are used for activities that prevent poor quality, that
    appraise the quality of the organization’s products or services, and that result from internal
    and external failures. Having such information allows an organization to determine the
    potential savings to be gained by implementing process improvements.

    WHAT IS COST OF POOR QUALITY


    (COPQ)?
    Cost of poor quality (COPQ) is defined as the costs associated with providing poor quality
    products or services. There are four categories:

     Internal failure costs are costs associated with defects found before the customer
    receives the product or service.
     External failure costs are costs associated with defects found after the customer
    receives the product or service.
     Appraisal costs are costs incurred to determine the degree of conformance to quality
    requirements.
     Prevention costs are costs incurred to keep failure and appraisal costs to a minimum.

    Quality-related activities that incur costs may be divided into prevention costs, appraisal
    costs, and internal and external failure costs.

    PREVENTION COSTS
    Prevention costs are incurred to prevent or avoid quality problems. These costs are
    associated with the design, implementation, and maintenance of the quality management
    system. They are planned and incurred before actual operation, and they could include:

     Product or service requirements: establishment of specifications for incoming


    materials, processes, finished products, and services
     Quality planning: creation of plans for quality, reliability, operations, production, and
    inspection
     Quality assurance: creation and maintenance of the quality system
     Training: development, preparation, and maintenance of programs
    APPRAISAL COSTS
    Appraisal costs are associated with measuring and monitoring activities related to quality.
    These costs are associated with the suppliers’ and customers’ evaluation of purchased
    materials, processes, products, and services to ensure that they conform to specifications.
    They could include:

     Verification: checking of incoming material, process setup, and products against


    agreed specifications
     Quality audits: confirmation that the quality system is functioning correctly
     Supplier rating: assessment and approval of suppliers of products and services

    INTERNAL FAILURE COSTS


    Internal failure costs are incurred to remedy defects discovered before the product or service
    is delivered to the customer. These costs occur when the results of work fail to reach design
    quality standards and are detected before they are transferred to the customer. They could
    include:

     Waste: performance of unnecessary work or holding of stock as a result of errors, poor


    organization, or communication
     Scrap: defective product or material that cannot be repaired, used, or sold
     Rework or rectification: correction of defective material or errors
     Failure analysis: activity required to establish the causes of internal product or service
    failure

    EXTERNAL FAILURE COSTS


    External failure costs are incurred to remedy defects discovered by customers. These costs
    occur when products or services that fail to reach design quality standards are not detected
    until after transfer to the customer. They could include:

     Repairs and servicing: of both returned products and those in the field
     Warranty claims: failed products that are replaced or services that are re-performed
    under a guarantee
     Complaints: all work and costs associated with handling and servicing customers’
    complaints
     Returns: handling and investigation of rejected or recalled products, including transport
    costs

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