Case 3-Comparative Analysis of Quality Costs and Organization Sizes in the Manufacturing Environment
Please review the case and respond to the following:
1. Do you think SMEs incur larger or smaller quality costs and why?
2. What do you think attributes to higher failure costs in larger organizations?
3. What do you think is the COQ in your organization? Comment broadly even if you don’t have accurate numbers.
4. Review and comment on other submissions.
Other Discussion Questions
1. If you have been involved in a benchmarking exchange, please share your experience.
2. Do you think benchmarking code of conduct is necessary? Why or why not?
3. Do you think the benefits of benchmarking out-way its costs? Why or why not?
4. Review and comment on other submissions.
Cost of Quality Analysis
The ABC Company has collected the following cost data for the year:
Receiving Inspection $ 15,232
Production Scrap $ 32,150
Rejected Products $ 6,200
Product Design $ 25,422
Customer Adjustment Credit $ 85,654
Online Inspection $ 17,248
Quality Team Meeting $ 7,540
Downgrading Products $ 1,125,328
Customer Need survey $ 3,250
Final test $ 25,758
Prototyping $ 136,802
1. Organize these cost in COQ categories and put any non-QOC data in NQ category.
2. Compute the ratio of prevention and appraisal costs to failure costs
3. Recommend strategies for reducing the Total Quality Cost.
