COSTS OF QUALITY_notes

COSTS OF QUALITY_notes - COSTS OF QUALITY - Chapter...

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COSTS OF QUALITY - Chapter Highlights Unit 3 - Chapter 2, Appendix 2A, pp 54-6 Quality Costs (Reinforcing Exercises: E2-5 and E2-9.) The term quality has many meanings. Quality can mean that a product has many features not found in other products; it can mean that it is well-designed; or it can mean that it is defect-free. In this appendix, the focus is on the presence or absence of defects. The quality of conformance is defined to be the degree to which the actual product or service meets its design specifications. Anything that does not meet design specifications is a defect and is indicative of low quality of conformance. 1. Costs of Internal and External Failure. The costs of not meeting design specifications are classified as internal failure costs and external failure costs . Defects that are detected internally result in costs such as scrap or rework. Defective units that are released to customers create external failure costs. Examples of external failure costs include customer returns and exchanges, repairs under warranties, product recalls, and lost sales due to a reputation for selling defective products. 2. Costs of Reducing Defects. There are basically only two ways to reduce defects and the resulting costs of internal and external failures. Either the defects can be prevented or they can be detected and corrected. a.
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COSTS OF QUALITY_notes - COSTS OF QUALITY - Chapter...

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