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This study aims to discover a practical and effective way to apply the quality cost concept in Strategic Cost Management (SCM) framework. The interaction of preventive, appraisal and failure (PAF) activities in a company's internal value chain will be the starting point of SCM implementation.

This study begins by establishing value chain and quality costs as the scope of conceptual analysis. Discussions on the interrelationships between activities, quality and costs were gathered to clarify conceptual and practical gaps in the scope of the study. The PAF quality cost model is applied to find viable, practical solutions. The costs of activities will serve as performance indicators.

The PAF quality cost model depicts opportunities to lower costs and increase profit in a business simultaneously; current poor quality costs are the benchmark. Identifying PAF activities and costs in the business value chain and linking it with others is crucial in evaluating SCM applications. These linkages will generate a Quality Cost Chain (QCC). The leading indicator of improvement is a higher ratio between new possible failure costs (FC) and the combination of prevention and appraisal costs (PAC) than the current value, followed by a lower total quality cost (TQC). The subsequent attention is a lower ratio between the appraisal cost (AC) and prevention cost (PC). Mathematically, for assessing the operability of new quality-related activities, ΔPAC_new < ΔFC_new, TQC_new < TQC_current, (FC/PC)_new>(FC/PC)_current and (AC/PC)_new<(AC/PC)_current are proposed as feasible conditional-quantitative improvement criteria.

This study only discusses the relationship between quality costs and activities related to quality management in the PAF quality cost model, not cost behavior. This limitation opens up opportunities for future research that intends to link QCC with cost behavior in the context of managerial accounting and Strategic Cost Management. The use of QCC in certain industrial areas is the next research opportunity. The variety of PAF activities this study addresses originates from a wide range of industrial sectors; QCC research by sector may produce unique industrial quality cost phenomena.

QCC will make it easier for managers to evaluate how strategically their departments or activities contribute to quality costs at the departmental or organizational level, as well as to effectively and efficiently improve quality cost performance.

The quality-related activity and quality cost issues are still rarely treated as subjects of research studies in the field of Strategic Cost Management. Even so, the discussion tends to be very broad, complex and difficult to apply. This study combines a simple diagrammatic and mathematical approach to simplify the discussion and, at the same time, manage the value of strategic quality management.

The ideals of total quality view contradicts with the traditional prevention‐appraisal‐failure (PAF) model. The PAF model, based on the “higher quality‐higher cost” notion, fails to explain the “higher quality‐lower cost” premise of total quality. The purpose of this study is to examine the behaviour of quality costs and investigate the two contradicting views.

Based on the literature, a generic descriptive model is developed to examine the dynamics of quality costs and quality level over time. Through illustrative examples, the behaviour of quality costs is demonstrated and relevant implications are highlighted.

The proposed model supports continuous improvement regardless of the effectiveness of the firm's quality improvement programs. When the quality improvement program is highly effective, the “higher quality‐lower cost” phenomenon is observed; whereas, in a less effective quality improvement program, the authors observe the “higher quality‐higher cost” phenomenon, which still calls for increased improvement effort necessary for quality sustainability.

The proposed model explains well the dynamics of quality costs, however, it can be further enhanced by incorporating the dynamics of the effectiveness of the firm's quality improvement program and its relation to quality level and quality costs.

The proposed model is a useful tool especially for quality improvement planning and budgeting decisions.

Balancing between the two contradictory views of quality costs, this study provides a deeper understanding of the relationship of quality costs and quality level.

The objective of this research is to apply the cost of quality (COQ) concepts in a hotel restaurant environment using the PAF (prevention, appraisal, and failure costs) model. Then use the percentage of sales approach to evaluate the significance of the COQ measures in the PAF model.

This research involved reviewing available literature on the COQ framework. Then through the process of interviews and secondary data collection, an analysis of the COQ measures in the PAF model was accomplished.

While researchers suggested that the COQ should be 2 to 4 percent of sales, the actual findings were 12 to 16 percent over a two‐year period. These findings help the restaurant quality management team to reevaluate the quality of food and services, and provide justification for more investment in prevention activities.

The practical implication from this study was that an investment in prevention activities in the PAF model for the restaurant did lead to reduction in failure costs (internal and external) and appraisal costs.

This study demonstrates that the COQ measures used in the PAF model can improve the quality of food and services provided to the restaurant customers, and therefore, result in improvement in overall profitability.

In this study, an integrative approach of customer satisfaction and cost of quality has been proposed for the value analysis of products based on a cost–benefit ratio.

For the integrative approach, Kano and prevention-appraisal-failure (PAF) models have been applied. By the proposed approach, the value of products can be analyzed according to customer viewpoints and cost of quality. Four products of a home appliance company have been used to examine the new approach.

Findings indicate the priorities of the studied products as stove, TV, fridge and washing machine, respectively. Such a set of prioritized products plays a strategic role in the competitive advantage of the studied company.

In this study, the weights of the cost of quality items have been assumed as equal. Also, the costs of quality items were limited to the most important ones at the studied company. However, more cost of quality items might be considered in different case studies.

In this study, the Kano and PAF models have been considered simultaneously for product value analysis from the viewpoint of customers. In addition to the classic method of value analysis which is merely based on previous events, the proposed approach is typically proactive.

This study aims at presenting deeper insights regarding the understanding and application of the quality costs (CoQ) in the automotive manufacturing industry. The empirical research included three general determinants: reasons for, difficulties during and benefits from implementing quality costs, as well as two specific determinants: measuring and evaluating quality cost elements.

The empirical research methodology employs the expert evaluation method – the Delphi method, using a survey questionnaire comprising a total of 200 questions, and answered by 9 companies.

The survey results showed that companies do recognize the reasons for implementing quality costs as a need arising from the quality management standards, the lack of knowledge of quality costs by employees and management as the biggest difficulty while the biggest benefit includes the quality costs enhance the company competitiveness. The costs competence and qualification, the quality management system costs, the costs for improvement, the production control costs, the input control costs, the new measuring and control equipment calibration costs, the costs related to scrap, repairs and product finishing are the most significant elements of the quality costs.

This study is limited by the small number of surveyed companies from the automotive cluster.

The proposed quality costs model provides to the management to conceive CoQ elements as possible drivers in the improvement process of product quality. The structure and the nature of the CoQ elements is expected to advance the process of detailing the quality costs elements.

The novelty of this paper refers to development of a generic quality cost model, whose relevance is confirmed by the structuring of the model with elements published in literature and validating in research companies.

The purpose of this paper is to critically examine existing models for cost of quality. Having identified issues and limitations of historic models, develop and implement a novel, structured hybrid cost of quality model to identify and effectively manage cost of company’s product.

A theoretical framework is proposed based on an integration of three existing, historical cost of quality models into a structured hybrid model. Subsequently, an exploratory pilot case study in a manufacturing environment is described that illustrates the value of the model.

The paper manages to find how a hybrid model can help identify cost of quality more accurately than the traditional models. Thanks to the new model, the author shows how gaps between product’s theoretical and actual costs can be highlighted. This allows management to drive down cost of quality and improve business performance.

The model would benefit from a company-wide implementation. The present study provides a starting point for further research in the international manufacturing sector.

The framework improves the knowledge of cost of quality by providing a new case study with full results and analysis from a UK-based manufacturing company. It provides a critical re-evaluation of available literature, including the most recent publications as far as practically possible within timescale available. The study shows the importance of comprehensive cost collection if companies are to have the right data needed to manage business excellence.

The paper presents a development of the first structured hybrid model for measuring cost of quality using the strongest points of main three approaches and addresses their limitations. It gives new arguments against allocation of some cost elements within BS 6143-2:1990, resulting in recommendations for further brainstorming of pros and cons of the suggestion.

By developing a better understanding of costs associated with improving organizational quality and costs incurred by neglecting it, banks could devise more optimal operational policies. The paper aims to discuss this issue.

This paper proposes a generic banking cost of quality (COQ) model developed from Colombian banking data. The model has been developed using the product performance approach, which is consistent with strategizing from a long-term and organization-wide perspective. The proposed COQ function is composed of prevention and appraisal categories, costs caused by events of operational risks and opportunity costs caused by events of credit risks measured though non-performing loans.

The model was validated using data obtained from three major Colombian banks. The significant theoretical contribution of this research stems from the development of a banking COQ model which represents a pioneer effort at quantifying quality costs in financial institutions.

This is a unique attempt at using a product performance approach in service industry and also a rare effort toward incorporating opportunity costs in COQ. Managerially, the proposed COQ model can be established as a holistic business strategy and can serve as a tool helping managers to evaluate the impact of quality management initiatives and to decide on trade-offs between quality level and quality costs.

There are three main objectives of the research presented in this paper: to examine the challenges of using an electronic adverse incident recording and reporting system; to assess the method of using a prevention appraisal and failure model; and to identify the benefits of using quality costs in conjunction with incident reporting systems.

Action diary, documentation and triangulation are used to obtain an understanding of the challenges and critical success factors in using quality costing within an adverse incident recording and reporting system.

The paper provides healthcare professionals with the critical success factors for developing quality costing into an electronic adverse incident recording and reporting system. This approach would provide clinicians, managers and directors with information on patient safety issues following the effective use of data from an electronic adverse incident reporting and recording system.

This paper makes an attempt of using a prevention, appraisal and failure model (PAF) within a quality‐costing framework in relation to improving patient safety within an electronic adverse incident reporting and recording system.

The study of quality economics for manufacturing has focussed mainly on investments and costs, rather than attempting to quantify the benefits of improved quality in the market. This article presents an approach based on both costs and benefits. Systems dynamics‐based simulation has been employed with an optimisation technique, to identify quality spending levels which result in maximum overall profit. The simulation models are based on a Thai automotive manufacturer, which had employed Kaizen for many years, and hence this quality improvement approach was simulated. Two market conditions were modelled: fixed and variable‐price according to the market response to changes in quality level. Optimum profits were found at higher levels of quality spending than actual company spending. The paper examines the details of the optimum condition for the variable‐price market condition. Conclusions are drawn concerning quality improvement strategies and the potential effects of different market pricing conditions on optimum quality spending.

A COQ model plays an important role in the total quality cost survey. Based on the methodology of continuous quality improvement, a dynamic COQ model for different quality level is developed in this paper. A quality level is defined by Six Sigma level that can be measured by two indicators. The relationships among the four major quality costs are analyzed. Finally, the curves of total quality costs for different quality level are presented.