Cost of Poor Quality Essay Example | Topics and Well Written Essays - 750 words

Cost of Poor Quality - Essay Example Theoretically there are two costs of quality related with the production and R&D. Firstly, the cost of the good quality and the cost of poor quality. The cost of poor quality affects the internal and external costs resulting from failing to meet the requirements whereas the cost of good quality affects the cost of investing in the prevention of non-performance to requirements and cost of appraising a product for conformance to the requirements. The costs related with the internal failure are the costs that are caused by non conformance to what the customer wants and these costs are found before the delivery of the product or service. This would off course lead to the customer dissatisfaction and demotivation of R&D staff. These internal costs will result in re-works, delays, re-designing etc. External failure costs are costs that are caused by deficiencies found after delivery of products and services to external customers, these costs will result into complaints, repairing and re-do ing services, warranty claims as well as losses due to sales reduction and which lead to customer dissatisfaction. By launching the product before the complete testing of the product, our company has made a tradeoff between generating sales and compromising on the quality. It was a gore mistake on the part of Mr. George Chadwick to start the production before the complete testing of the material for its fine-tuning. Backed by more of ambitions and less of reality, this decision has now seems to backfire as the company is facing strong quality costs. One of the important quality control tools is called Pareto Analysis.