Cost of quality is the means of quantifying the cost of all efforts related to quality. It also covers the total cost of the deficiencies that a business encounters in its course of production (Campanella, 1990). Cost of quality is the cost inquired by an organization as a result of creating poor-quality products or offering poor services. The cost of quality increases every time work is redone on a product. Any cost that would not have incurred if the product or service was in good condition amounts to the cost of quality. The four main elements of cost of quality include prevention costs, appraisal costs, external failure costs, and internal failure costs (Guy, 2011). The following Value Chain diagram has specific quality points that are easily identifiable.
Value Chain and Quality
Each quality point is associated with the cost of quality, the responsible party, and the cost of each quality. The quality points are consistent with the expenditure of the company in reworking on the already completed products. The quality points are also consistent with the effectiveness of the responsible employees or departments. There are specific costs associated with each quality point as indicated in the value of chain. Additionally, the parties have specific responsibilities that they need to apply to decrease the cost of quality.
Campanella, J. (1990). Principles of Quality Costs: Principles, Implementation, and Use (2nd
ed.). Milwaukee, Wis.: ASQC Quality Press.
Guy, Q. (2011). Cost of Quality Basics. Retrieved January 25, 2014 from:
http://www. costofquality. org/