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Prevention Cost in Quality
Costing
Ita Akyuna NightisabhaS4307076
Abstract
Improving quality is considered by many to be the best way to enhance customer satisfaction, reduce manufacturing costs and to increase productivity. Because the main language of
corporate management was money, and costs were the heart of its life cycle, there emerge the concept of studying
of costs that related with quality. The core problem of improving quality is no more defect. A defect is causing
some costs which classified as a prevention cost, appraisal cost, internal failure cost and external failure cost. Even
though there is a difference on the characteristic and dissemination of quality cost, most experts agreed that management should focus on preventing a defection, because a small investment for the prevention could significantly reduce an appraising and failure cost.
Keywords : improving quality, cost of quality, prevention cost.
What’s Quality?
Quality is how the recipient of the product or service views it: before buying, upon delivery, and after the delivery-and use the product
Quality Costing
Quality cost is a noun which signifies a cost that is found to be related to quality in some way. Quality costing is method of measuring quality cost to simulate quality improvement
Quality Cost are Classified to :
1-Internal Failure Costs. These are costs of deficiencies discovered before delivery which
are associated with the failure (nonconformities) to meet explicit requirements or implicit needs of external or internal customers.
2-External Failure Costs. These are costs that would disappear if no deficiencies existed.
These are costs associated with deficiencies that are found after product is received by the customer.Also included are lost opportunities for sales revenue.
3-Appraisal Costs. These are the costs incurred to determine the degree of
conformance to quality requirements. 4-Prevention Costs. These are costs incurred to keep failure and appraisal costs to a
minimum. The Total Cost Of Quality is the sum of the 4 categories
above.
Prevention Cost
Related to the activity of any hindrance in production or process approaches, quality planning, quality functions deployment and complete quality
Prevention Cost Contd..
Prevention is designed to keep errorsfrom accuring in the process in the
firstplace. That’s Quality AssuranceInspection is designed to keep product errors from reaching the customer
Appraisal Cost
Evaluating a product/service at sequential stages to determine its acceptability.
Appraisal cost cannot be avoided unless a full control is achieved.
It includes all costs incurred in conducting appraisal of a product to determine compliance to the requirement.
Appraisal Cost Contd..
Design reviews are part prevention and part appraisal. To the degree that you are looking for errors in the proposed design itself when you do the review, you’re doing an appraisal. To the degree that you’re looking for ways to strengthen the design, you’re doing prevention
Failure Costs
Internal Failure Costs that arise before your company supplies its product to the customer
External Failure Costs that arise after your company supplies its product to
the customer
Benefits of measuring cost of quality
Higher productivityLess reworkLess hassleLess wasteGreater customer satisfactionImproved corporate image
Final Word
Prevention is cheaper than inspection
Wasted materials, rework costs and potensial lost of customer are all avoided
Thank you
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