Costs of Quality
Quality management is not only concerned with maintaining the quality characteristics of a product but also with doing the same at least cost. There are basically three categories of cost of quality.
1. Cost of Appraisal: These are cost of inspection testing and such checking operations are necessary to maintain the product quality. This includes the costs of the implementation of quality, and also the costs of monitoring and control.
2. Costs of Prevention: These are the costs of prevent the production of bad quality output. These include costs of activity such as quality planning which tries to ensure that proper precautions have been taken to avoid wrong sampling plans being made or bad quality or raw materials entering into plant or improper methods and processes being followed in the plant.
3. Costs of Failure: In spite of prevention and appraisal these will still be losses due to rejects rework spoilage etc, to some extent. These as well as the costs of attending to customer complaints and providing product service, are included under the category of costs of failures.