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Article
Publication date: 1 April 2002

D.G. Gouws and H.P. Wolmarans

Student failure in tertiary education costs taxpayers and donors large sums each year. The cost of quality can be substantial, but it can also be a source of significant…

Abstract

Student failure in tertiary education costs taxpayers and donors large sums each year. The cost of quality can be substantial, but it can also be a source of significant savings. This study attempts to provide a framework in terms of which these costs can be quantified through the application of the principles of quality costing in tertiary education. An emphasis on quality increases profitability by increasing student throughput and by decreasing the cost of the provision of services. Significant savings are possible if the educational system could achieve greater success by focusing on adding value to those students that are more likely to succeed. If quality costing is made visible in the South African tertiary education system, it could have a profound impact on the products (students) that are delivered to society.

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Meditari Accountancy Research, vol. 10 no. 1
Type: Research Article
ISSN: 1022-2529

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Article
Publication date: 1 October 2006

Suresh Kumar Krishnan

The purpose of this study, with its central thesis placed on excelling at business measures, is to underscore the need for business entities to understand the significant

Abstract

Purpose

The purpose of this study, with its central thesis placed on excelling at business measures, is to underscore the need for business entities to understand the significant implication of hidden failure costs and its impact on their business processes. The study also stresses the need for organizations to systematically break the many norms.

Design/methodology/approach

This study looked at capturing the often‐overlooked component of poor quality cost via a simple function of measurement which requires an effortless yet painstaking way of collecting data pertaining to intangible wastages in the form of time, service charges and material.

Findings

A simple formula is introduced, using three types of indicators that could be used to monitor the level of poor quality costs (PQC), to quantify the total failure costs by accumulating the values of both hidden and visual failure costs.

Originality/value

The study breaks the boundaries of existing methods of understanding and calculating the all‐embracing cost of doing business, hence paving the way to make inroads in business processes improvement, enhanced job‐scope comprehension, agility and performance, further intensification of internal and external customer satisfaction.

Details

Measuring Business Excellence, vol. 10 no. 4
Type: Research Article
ISSN: 1368-3047

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Article
Publication date: 29 April 2021

Niveen Mohammed Ghunaim and Ayham A.M. Jaaron

Due to the ever-increasing competitive and complex business environments, food manufacturing companies have to maintain high-quality products while simultaneously…

Abstract

Purpose

Due to the ever-increasing competitive and complex business environments, food manufacturing companies have to maintain high-quality products while simultaneously minimizing customers' costs. Cost of quality (COQ) plays a crucial role in enhancing companies' efficiency and reducing expenditures that can contribute to companies' competitive performance. This paper investigates the underlying relationship between the level of COQ practices adoption (prevention, appraisal, internal and external failure costs) and organizational performance in Palestinian food manufacturing companies (PFMCs).

Design/methodology/approach

A quantitative research methodology using a structured questionnaire collected data from 119 PFMCs. Partial least squares structural equation modeling was used to analyze collected data.

Findings

Results indicated that COQ adoption has a significant positive effect on the organizational performance of PFMCs. Besides, prevention, external and internal failure costs were all associated with a positive impact on organizational performance of PFMCs, whereas appraisal cost did not affect organizational performance.

Originality/value

This study is considered one of the first studies to investigate COQ practices' effect on organizational performance in food manufacturing companies in a developing country context. Thus, it adds significant value to the literature responding to calls to tackle competitiveness issues in current complex business environments.

Details

The TQM Journal, vol. ahead-of-print no. ahead-of-print
Type: Research Article
ISSN: 1754-2731

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Article
Publication date: 19 November 2018

Evangelos Psomas, Christina Dimitrantzou, Fotis Vouzas and Nancy Bouranta

The purpose of this paper is to focus on the cost of quality (CoQ) of food manufacturing companies. The study aims at empirically validating the conceptual structure of…

Abstract

Purpose

The purpose of this paper is to focus on the cost of quality (CoQ) of food manufacturing companies. The study aims at empirically validating the conceptual structure of the core dimensions of CoQ (prevention, appraisal, internal and external failure cost) and determining their level and relationships. Determining the reasons for not measuring the CoQ as well as the barriers-difficulties and benefits of the CoQ measurement is also an aim of the present study.

Design/methodology/approach

Greek food manufacturing companies were approached through a structured questionnaire and 91 participated in the study. Exploratory and confirmatory factor analysis, descriptive statistics and correlation analysis are applied for data analysis.

Findings

The structure of the core dimensions of CoQ is empirically validated, while all of them range within medium levels and are inter-related. The reasons for companies not measuring the CoQ as well as the barriers-difficulties of companies measuring the CoQ are not significant. On the contrary, significant benefits are derived from the CoQ measurement.

Research limitations/implications

The small sample of the food manufacturing companies operating in one country and the subjective business evidence collected are the main limitations of the present study.

Practical implications

Food companies can be motivated to establish a robust CoQ measurement system, which would reflect the level of the CoQ dimensions. According to the results of the CoQ measurement, a food company can make decisions to increase the prevention and appraisal costs and decrease the internal- and external-failure costs in order to be more competitive in the market.

Originality/value

The paper provides deeper insights into the level and inter-relations of empirically validated CoQ dimensions. Very few studies on the CoQ in food manufacturing companies have been carried out in Greece and the present study makes the picture of the CoQ status in this sector more clear.

Details

International Journal of Productivity and Performance Management, vol. 67 no. 9
Type: Research Article
ISSN: 1741-0401

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Abstract

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International Journal of Operations & Production Management, vol. 21 no. 1/2
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 1 March 1990

L. Brennan, H. Cullinane, C. O′Connor, D. Punch and J. Sheil

The determination of quality costs on a production line is discussed. An approach to quality costs analysis is developed and illustrated employing a particular production…

Abstract

The determination of quality costs on a production line is discussed. An approach to quality costs analysis is developed and illustrated employing a particular production line. This line which is devoted to the assembly and testing of an advanced computer system is fully described. A diagrammatic model of the production line is presented which displays points on the line at which quality costs can arise and the nature of these costs. A quality cost model for this line incorporating prevention, appraisal and failure cost elements is presented and their estimation discussed. It is argued that the modelling concept developed can provide a general framework for the isolation of quality costs.

Details

International Journal of Quality & Reliability Management, vol. 7 no. 3
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 1 April 2004

Vincent K. Omachonu, Sakesun Suthummanon and Norman G. Einspruch

This paper examines the components of quality cost (internal failure, external failure, appraisal cost, and prevention cost) in the context of two key manufacturing…

Abstract

This paper examines the components of quality cost (internal failure, external failure, appraisal cost, and prevention cost) in the context of two key manufacturing inputs, materials and machines; the concept is also explained for the company as a whole. The purpose of this research is to analyze the variables that impact quality in a manufacturing environment. There are three major findings in this research. First, there is an inverse relationship between appraisal cost plus prevention cost and failure cost. Second, the relationship between appraisal cost plus prevention cost and quality is positive. Finally, failure cost is negatively correlated with quality. This analysis also revealed a strong relationship between appraisal cost plus prevention cost and quality for material input, machine input, and the company. The results indicate that as the appraisal cost plus the prevention cost increases, quality improves and failure cost decreases.

Details

International Journal of Quality & Reliability Management, vol. 21 no. 3
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 22 April 1991

Heidi Hylton Meier

Measuring quality costs is becoming an increasingly more important task for accountants. This is especially true in light of new definitions and goals of quality programs…

Abstract

Measuring quality costs is becoming an increasingly more important task for accountants. This is especially true in light of new definitions and goals of quality programs, which are primarily to produce goods and services with zero defects while preventing problems, improving reliablity and eliminating waste. This article examines how accountants can provide cost information using the traditional quality cost model along with expected value techniques so that managers may make more effective decisions to accomplish these goals.

Details

American Journal of Business, vol. 6 no. 1
Type: Research Article
ISSN: 1935-5181

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Article
Publication date: 1 August 1998

Angel R. Martinez Lorente, Alejandrino Gallego Rodriguez and Louise Rawlins

Quality costs have been discussed widely in the literature. This discussion has not always agreed and it is possible to identify two basic schools of thought; one asserts…

Abstract

Quality costs have been discussed widely in the literature. This discussion has not always agreed and it is possible to identify two basic schools of thought; one asserts the existence of a minimal level of quality cost for a given level of prevention and appraisal activities, and the other asserts that through prevention quality improvement is constant. This paper summarises these positions and outlines a behaviour model of quality costs that unifies and clarifies them. The behaviour model is based on the consideration of the cumulative effects of prevention. Ceteris paribus, continuous prevention activities should permit quality improvements whilst at the same time reducing the costs necessary to obtain them. The behaviour model introduces the effect of external quality requirements in an attempt to explain how, over time, quality improvement efforts do not necessarily result in decreased quality costs as customers’ quality requirements rise over the same period.

Details

International Journal of Operations & Production Management, vol. 18 no. 8
Type: Research Article
ISSN: 0144-3577

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Article
Publication date: 1 August 1994

Geanie W. Margavio, Ross L. Fink and Thomas M. Margavio

Quality improvement decisions are the catalyst for substantialtechnological improvements being made in the manufacturing sector. Thenew technology, however, has developed…

Abstract

Quality improvement decisions are the catalyst for substantial technological improvements being made in the manufacturing sector. The new technology, however, has developed faster than techniques for evaluating capital investments in such improvements. This is largely because the benefits of quality improvement technology are difficult to quantify. The Taguchi loss function is incorporated into a net present value capital budgeting technique to provide an estimate of these benefits. Describes the loss function in relation to key quality costs: appraisal and prevention costs, and internal and external failure costs. External failure cost savings are generated by reducing variability in the manufacturing process. These savings are then compared with the cost of the quality improving technology. Results indicate that these savings can be substantial, depending on the achieved reduction in the process variability, the cost of capital, and on the estimate of the cost of processing a customer’s return of the product.

Details

International Journal of Quality & Reliability Management, vol. 11 no. 6
Type: Research Article
ISSN: 0265-671X

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