Memo for Quality (Cost Quality Relationship)

In: Business and Management

Submitted By shalom7785
Words 487
Pages 2
Memorandum
To: Stan Smith COO
From: Ashish Alexander
Date: 01/21/2013
Subject: cost quality relationship
Cc: All department managers
‘Quality’ is the resounding word we hear from our customers. In today’s global market quality has great importance. Quality in a sense is the driving force behind our customer loyalty, the desire for quality products among our customers is in high demand. They desire products made to specification and rigorously checked for quality. Our goal is to produce the world’s best quality products.
Quality standards- Provide our customers with the best quality humanly possible with an absolute 0% tolerance for substandard products.
A. Any serious attempt to deal with quality issues must take into account the costs associated with quality. Those costs can be classified into three categories: appraisal, prevention, and failure (Stevenson & William 2008). Let us examine the preceding categories.

B. Appraisal cost can be defined as the procedure or method to produce high quality products or find defect / flaws in the initial stage. Appraisal costs may include field testing, double blind surveys, close inspections, testing in controlled environments, and quality auditing.
Prevention costs are related to attempts to prevent defects from occurring. They include costs such as planning and administration systems, working with vendors, training, quality control procedures, and extra attention in both the design and production phases to decrease the probability of defective workmanship.
Failures costs can be internal or external; internal failures are those discovered during the production process; external failures are those discovered after delivery to the customer. Internal failures occur for a variety of reasons. The absolute worse area to have a failure is external. This can affect the company’s reputation to say the least. If the…...

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