Describe two benefits of improving quality.

Quality costs (including the opportunity cost of lost sales because of poor quality) can be as
much as 10% to 20% of sales revenues of many organizations. Quality-improvement programs
can result in substantial cost savings and higher revenues and market share from increased
customer satisfaction.

19-2 How does conformance quality differ from design quality? Explain.

Design quality refers to how closely the characteristics of a product or service meet the needs
and wants of customers. Conformance quality refers to the performance of a product or service
relative to its design and product specifications.

19-3 Name two items classified as prevention costs.

Exhibit 19-1 of the text lists the following six line items in the prevention costs category: design
engineering; process engineering; supplier evaluations; preventive equipment maintenance;
quality training; and testing of new materials.