TQM-CHAPT-2 (1).docx - CHAPTER 2 Quality Cost To exist is...

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CHAPTER 2- Quality Cost To exist is to change, to change is to mature. To mature is to go on creating oneself endlessly. -Henri Bergson INTRODUCTION The top management looks at every activity in the organization in terms of return on direct and indirect investment. However, this does not mean that they are looking for short-term gains only. They don’t mind waiting for years, if ultimately the efforts are going to pay out. TQM- was evolved to satisfy customers in the most economical way. Quality -means cost of effectiveness. It means reducing expenditure by eliminating wastes through systematic quality management approach. Therefore it is important to compute expenditure incurred an account of poor quality, and prevent it. TQM - aims at gradual reduction of wasteful expenditure and eventually their total elimination. Quality cost -should be accounted separately so as to know how much the organization is losing on account of poor quality. Decreasing cost of production should indicate quality improvement. Accounting and analyzing quality cost has given innumerable benefits to the organizations. Thus the quality cost is an important tool for TQM COST OF QUALITY Cost of quality (COQ) - is the sum of cost incurred by an organization in preventing poor quality. There are essentially 3 types of quality costs as given below: 1. Prevention Costs 2. Appraisal Costs
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PREVENTION APPRAISAL INTERNALEXTERNAL 3. Failure Costs PAF MODEL This is called PAF model, name abbreviated from the first letters of the 3 categories. Any quality cost which arises in an industry can be classified in one of the above 3 categories.
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  • Summer '18
  • sir reyes

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