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Quality Management: Costs for Quality Products - Essay Example

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The writer of this essay will outline the types of cost that the company should consider for quality products. Three types of costs when quality considerations are made include appraisal costs, prevention costs as well as external and internal failure costs…
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Quality Management: Costs for Quality Products
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Download file to see previous pages It is imperative to note that higher costs are incurred during the collection of defects than during their prevention. The major objective of prevention costs is to support strategies and actions that are focused on minimizing the number of defects in the products. In addition to the tools that are adopted from total quality management (TQM), firms emulate various tactics including training, statistical process control among others to prevent defects (Belshel, 1990). Prevention costs are also incurred during the activities undertaken by quality circles. These include groups composed of managers and other employees who meet regularly with an aim of improving the quality of the products. On the other hand, statistical process control is an example of prevention costs that determine the status of a process (Belshel, 1990). In order to ensure that the final products have no defects, employees in the process control use charts to monitor all the status of units that pass through the system. In this way, workers are able to detect the processes that are not working effectively thus avoiding defects which are costly to collect after the final product is produced. Technical support provided to suppliers is another key example of prevention costs. Technical support is particularly useful for firms that adopt just in time system. This entails checking the quality of the various units that are supplied to the company. In case a defective part is received from a supplier, it cannot be used to make the final products (Accounting for management, 2011). To ensure quality products that are free of defects, suppliers should be obliged to use statistical process control among other control programs. Other examples of prevention costs are experienced during the gathering and analyzing of data, auditing of a quality system and supervision of activities undertaken to prevent defects. Appraisal costs In order to retain the loyalty of the existing customers, it is fundamental to detect defective products before there are delivered to the customers. Appraisal costs entail the costs incurred during the detection of defective products during the production process as well as in the course of delivering the products to the customers. Examples of appraisal costs include inspection and testing of final products and raw materials, inspection and testing of goods-in-process, servicing of equipment used in the testing process, field testing among others. Even though inspectors are aimed at producing products that are free from defects, the occurrence of defects is still a challenge in this organization. In this regard, managers should emphasize the responsibilities of the employees to ensure the quality of products (Belshel, 1990). This will ultimately reduce the inspections costs that are incurred during the removal of the defects. Failure costs Failure costs entail the costs incurred to make the final products match with its design. Failure costs are either external or external. Internal failure costs are incurred as a result of detection of defects before the products are delivered to the customers. Examples of internal failure costs include rejected products, scrap, time wasted during the collection of the quality problem as well as costs associated with redesigning the defective products.  ...Download file to see next pagesRead More
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