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Quality and Cost (Unit 1 IP) - Research Paper Example

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This may cause the hotel to incur costs in terms of the freebies the hotel might have to offer the customer to make a service recovery.
4. No evidence of the…
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Quality and Cost (Unit 1 IP)
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Cost of Quality (COQ) for Check-in and Check-out Procedures at Hotel Escargo Hotel Escargo needs to assess the wastages or losses from its defined processes (PQA, 2006), which are termed as cost of quality (COQ).
Processes for Escargo Hotel
The Check-in Procedure and the Check-out Procedure
The cost of quality can be broken down into the scopes or elements as per cost categories:
The internal costs of rework or redesign of process, offering guest discounts etc
The external costs of loss of credibility and lawsuits
The preventive costs such as costs of designing quality systems or process to avoid losses
The assessment costs which are associated with appraisals of processes and inspection of operations or design of training manuals (Pizam, 2010)
Internal Costs of Quality (COQ)
Those COQs are associated with inefficiencies in the check-in and check-out system and make the hotel incur costs due to wastage of resources. For example,
1. Guest name is not being used three times, which may lead to guest dissatisfaction.
2. Inconsistency in greeting the guest as per the time of the day after looking up to them, may lead to dissatisfaction.
3. No evidence of acknowledging the guests waiting in the line may lead to customer dissatisfaction.
Items 1 through 3 point out the possibility of the guest being dissatisfied due to a fault in internal procedures. This may cause the hotel to incur costs in terms of the freebies the hotel might have to offer the customer to make a service recovery.
4. No evidence of the reservation clerk asking for arrival time and credit card information. This means the clerk waits for the customer to give this information and does not proactively pursues it. This leads to a reservation not being associated with a room being kept ready for the guest upon arrival. This causes delay and customer having to wait and may lead to customer dissatisfaction. Also, this means the Hotel might have to incur additional costs in terms of entertaining him during the waiting period. For example, they might have to serve a complementary meal depending upon situation or a seat in the customers lounge. This is an internal COQ.
5. No evidence of the clerk asking for room preference. This may lead to the guest being dissatisfied with the room he gets and may lead to bad word of mouth and loss of business. This is an example of internal COQ.
External Costs of Quality (COQs)
Those COQs are associated with the guests experiencing bad service levels and delays etc. in service
Average check-in time exceeding the 4 minute standard, which in many cases might add to the customer dissatisfaction as well as the hotel is not getting the desired rating, and hence loss of business in terms of opportunity costs. This is an example of an external COQ.
Usually in case of services, it is often difficult to differentiate costs as external or internal ones since the delivery of service is not detachable from the production of the service. Services being process based, the process cost can not usually be categorized as external.
Preventive Costs
In order to achieve consistency in the behavioral aspect of the check-in process, for example, the standard three times the guest needs to be addressed by name, the staff needs to be trained accordingly. Sometimes, when the standards are not being met, the staff needs refresher trainings as well. This is a possible preventive cost of quality in the given scenario.
Assessment Costs
In order to gauge the defects and problems in the process, the hotel shall have to do regular checks and inspections. This means costs in terms of man hours and is an assessment cost
Hotel Escargo might decide to hire an external agency to survey the process efficiencies for the check-in and check-out procedures which appear to be faulty for further investigation. This is an additional cost of quality and can be termed as an assessment cost.
All the above identified costs shall be listed and then the data for the same shall be collected by quantifying the losses or costs incurred as costs of quality. They shall all be added (Pyzdek, 2000) to give an estimate of the cost of quality for the check-in and check-out procedures for Escargo Hotel.
Pizam, A. (2010). International encyclopedia of hospitality management. Butterworth-Heinemann.
PQA. (2006). Cost of quality. Retrieved July 16, 2012, from Process Quality Associates Inc.:
Pyzdek, T. (2000). Cost of quality overview. Retrieved July 15, 2012, from Quality America: Read More
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