Measuring Cost Of Quality A Case Study
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Date
2002-03
Authors
Singh, Amar
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Abstract
The measurement of Cost of Quality (COQ) has been around for a long
time. Its use has not been widely spread due to limited resources on knowledge and
application skills.
This study is an investigation on the quality cost measurement practice at
Company ABC, Penang. Company ABC has been measuring COQ from the early
nineties. This study reviewed data from 1992 to 1996. The elements us~d in its Quality
Cost System were reviewed and the application of the elements were analysed. The
overall COQ was then compared to present-day standards and studies. It was found
that there were several elements of COQ that were not measured in Company ABC's
quality cost system. Some elements, for example absenteeism, calibration, labour
inefficiencies and labour turnover are not included in the calculation of quality cost.
These elements should have been included, given the present day economic and labour
shortage in the country. These elements, together with several others are listed and .
discussed in some detail in this thesis.
A proposed COQ measurement system was developed with additional
elements and a comparison study was carried out between the proposed and present
practices. The proposed COQ measurement system was compared to other studies in a
tabular format and discussed. The COQ at Company ABC was 9.22% as a percentage
of sales and was found to be in line with other studies.
Description
Keywords
Management , Quality assurance