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Article
Publication date: 1 August 1994

Paul D. Larson

While the purchasing literature notes the importance of quality, itreports little empirical study into causes and consequences of supplierproduct quality. Develops, tests…

Abstract

While the purchasing literature notes the importance of quality, it reports little empirical study into causes and consequences of supplier product quality. Develops, tests and finds empirical support for the following propositions: higher levels of buyer‐supplier co‐operation lead to higher product quality, and lower total costs; higher product quality yields lower total costs. These results are based on survey responses from over 500 members of the National Association of Purchasing Management (NAPM), who purchase components for manufacturing firms.

Details

International Journal of Physical Distribution & Logistics Management, vol. 24 no. 6
Type: Research Article
ISSN: 0960-0035

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Article
Publication date: 17 April 2007

Yumin Liu

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

Abstract

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.

Details

Asian Journal on Quality, vol. 8 no. 1
Type: Research Article
ISSN: 1598-2688

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Article
Publication date: 13 February 2007

Victor E. Sower, Ross Quarles and Eric Broussard

The purposes of this study are to examine the relationship between the distribution of quality costs and the level of maturity of an organization's quality system, to…

Abstract

Purpose

The purposes of this study are to examine the relationship between the distribution of quality costs and the level of maturity of an organization's quality system, to assess the extent to which effective COQ systems and maturing quality systems affect organization performance, and to determine why some organizations do not utilize COQ systems.

Design/methodology/approach

A survey instrument was developed to determine the distribution of total quality cost among the four ASQ categories. The instrument also assesses the maturity of the organization's quality system using the ANSI/ISO/ASQ Q9004‐2000 performance maturity level classification system. Correlation analysis was used to examine the relationships between quality costs and quality system maturity.

Findings

External failure costs were found to decline as a percentage of total cost of quality (COQ) as an organization's quality system matures. Total COQ was found to increase as an organization moved from a very low level of quality system maturity to a higher level. Sales and profit growth were not significantly correlated with the presence of a quality cost system or with the level of maturity of the quality system. Lack of management support was found to be the most common reason why organizations do not systematically track quality costs.

Research limitations/implications

Additional research is needed to determine the relationship between the presence of a COQ system and its effective integration with the quality system and organizational outcomes. Future research is needed to expand the study beyond the boundaries of the USA. Future research involving longitudinal studies would be beneficial in more accurately assessing the nature of the changes in COQ distribution over time.

Practical implications

The findings of this study suggest that organizations planning to implement a COQ system should ensure that management supports the program and is prepared for a short‐term increase in total COQ. These findings also support the often‐suggested expectation that in the long run the COQ system will lead to a significant reduction in external failure costs.

Originality/value

Systematic measurement of COQ is underutilized in practice. This study systematically examines why this is the case. In addition the study provides information that can be useful in justifying implementation of COQ measurement systems.

Details

International Journal of Quality & Reliability Management, vol. 24 no. 2
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 3 October 2016

Markus Plewa, Gernot Kaiser and Evi Hartmann

The purpose of this paper is to provide empirical evidence for competing representations of the prevention-appraisal-failure model of quality cost.

Abstract

Purpose

The purpose of this paper is to provide empirical evidence for competing representations of the prevention-appraisal-failure model of quality cost.

Design/methodology/approach

The authors conduct regression analysis on a secondary data set to reveal relationships among total cost of quality, its components and overall quality performance.

Findings

Total cost of quality and its failure cost component are significantly lower at higher levels of quality, while the prevention and appraisal cost components are not observed to be significantly higher at higher levels of quality. The authors propose a modification to the modern representation of the prevention-appraisal-failure model.

Practical implications

In manufacturing, ever higher levels of quality are associated with significantly lower quality cost.

Originality/value

Using a large, unique data set for secondary analysis, combined with employing a high-level measure for overall quality performance, the authors provide evidence for the aggregate explanatory power of prevalent representations of the prevention-appraisal-failure cost of quality model.

Details

International Journal of Quality & Reliability Management, vol. 33 no. 9
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 1 February 1988

Overview All organisations are, in one sense or another, involved in operations; an activity implying transformation or transfer. The major portion of the body of…

Abstract

Overview All organisations are, in one sense or another, involved in operations; an activity implying transformation or transfer. The major portion of the body of knowledge concerning operations relates to production in manufacturing industry but, increasingly, similar problems are to be found confronting managers in service industry. It is only in the last decade or so that new technology, involving, in particular, the computer, has encouraged an integrated view to be taken of the total business. This has led to greater recognition being given to the strategic potential of the operations function. In order to provide greater insight into operations a number of classifications have been proposed. One of these, which places operations into categories termed factory, job shop, mass service and professional service, is examined. The elements of operations management are introduced under the headings of product, plant, process, procedures and people.

Details

Management Decision, vol. 26 no. 2
Type: Research Article
ISSN: 0025-1747

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Article
Publication date: 1 April 2014

Mohamed Khaled Omar and Sharmeeni Murgan

The purpose of this study is to present a report on the development of an improved mathematical model for quantifying the cost of quality. In addition, a simulation model…

Abstract

Purpose

The purpose of this study is to present a report on the development of an improved mathematical model for quantifying the cost of quality. In addition, a simulation model is developed using real-life industrial data; the model is used to investigate the impact of certain quality control level plans on cost of quality.

Design/methodology/approach

The cost of the quality model was developed based on the reported literature and suggestion from the company quality control manager. An extensive discussion was conducted with the quality control supervisors in the company to develop some quality control plans to investigate their impact on cost of quality. A simulation model that represents a specific section of the process at the company was used to carry out the investigation. The results were analysed and compared with some important findings reported in the literature that describe the characteristics of costs of quality.

Findings

The simulation work provides valuable insights into the behavior of the different components that constitute the total cost of quality. The results show that reduction of failure costs can be achieved at low or no-subsequent increase in the non-conformance expenditure. In addition, it seems that the traditional accounting system approach may no longer be adequate since it depends mainly on direct labour costs. The results indicate that the direct labour cost is only contributing by about 3 percent of the total cost of quality.

Research limitations/implications

This paper focuses on the development of a comprehensive model for quantifying the cost of quality in a semiconductor company. Future research is needed to expand the model for more complex process configuration. In addition, the developed model could be extended to deal with variant defect rates.

Originality/value

This study presents an advanced theoretical model for cost quality that enhanced models of quality presented in the literature. Using the developed cost of the quality model, a comprehensive simulation was carried out to investigate the impact of some quality plans on cost of quality. The study clearly indicates important evidence to justify the implementation of cost of quality models in real-life industry.

Details

International Journal of Quality & Reliability Management, vol. 31 no. 4
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 5 September 2008

Seokjin Kim and Behnam Nakhai

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”…

Abstract

Purpose

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.

Design/methodology/approach

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.

Findings

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.

Research limitations/implications

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.

Practical implications

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

Originality/value

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

Details

International Journal of Quality & Reliability Management, vol. 25 no. 8
Type: Research Article
ISSN: 0265-671X

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Article
Publication date: 1 June 1988

James M. Kenderdine and Paul D. Larson

Logistics decisions can have a significant impact on product offer quality so quality costs must be integrated into total cost analysis.

Abstract

Logistics decisions can have a significant impact on product offer quality so quality costs must be integrated into total cost analysis.

Details

International Journal of Physical Distribution & Materials Management, vol. 18 no. 6
Type: Research Article
ISSN: 0269-8218

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Article
Publication date: 31 July 2009

Behdad Kiani, Hadi Shirouyehzad, Fahime Khoshsaligheh Bafti and Hamidreza Fouladgar

The purpose of this paper is to propose a model for analysing the influence of costs of quality.

Abstract

Purpose

The purpose of this paper is to propose a model for analysing the influence of costs of quality.

Design/methodology/approach

A model is designed by using a causal loop diagram and is analysed through a system dynamics approach. The model simulation is prepared by Vensim software.

Findings

Prevention and appraisal costs are the two effective cost factors. The model represented in this paper reveals that prevention costs have the most effect on total cost of quality and especially external failure costs. Hence, in order to achieve the customer expected quality level, prevention and appraisal costs should be considered.

Research limitations/implications

Calculating and measuring non‐conformance costs is very difficult in organizations and some errors and mistakes may happen.

Practical implications

A system dynamics approach can analyse and measure the amount of prevention cost effects on cost of quality in different organizations.

Originality/value

The proposed methodology demonstrates the use of an innovative approach in developing a cost of quality concept and constructing a practical framework for system dynamics in a real case.

Details

International Journal of Quality & Reliability Management, vol. 26 no. 7
Type: Research Article
ISSN: 0265-671X

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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.

Details

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

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