A First Course in Quality Engineering

QUALITY COST STUDY OF XYZ CHEMICAL PLANT—19XX

1 Quality planning
2 Vendor qualification (supplier certification)
3 Acceptance inspection and test planning (planning for inspection)
4 Process equipment design for quality
5 Quality task teams (special projects to rectify quality problems)
6 Turnaround planning—Equipment (quality-related scheduled maintenance
7 Turnaround planning—Instruments (quality-related scheduled maintenance)
8 Quality profiling (determining product specs to meet customer needs
9 Quality statistics (collection of data and analysis)
10 Planning quality motivational programs
11 Production engineers on quality
12 Process control engineering—QA department
13 Process control engineering—Engineering department
14 Systems conformance (audit to verify system’s conformance)
15 Design/development of quality measurement/control equipment
Engineering department
QA department
16 Quality training
17 Raw material acceptance testing
18 Process testing—Operators
19 Review production analysis data
20 Environmental testing (as it relates to product quality)
21 QA in no. 1, no. 2, lot analysis, instrument calibration, and aging checks
22 Off-grade burned
23 Off-grade blended off-labor
24 Off-grade storage with interest
25 Reprocessing/sold at reduced cost
26 Partial credit issued—Customer kept product
27 Bulk returns
28 Packaged returns
29 Returns to other locations
$/MONTH
70
7150
100
370
1940
330
650
1000
420
170
70
27,050
12,500
70

740
900
1050
3345
13,300
530
70
61,313
3300
210
3200
5300
760
2750
3500
420
Prevention costs:
Quality planning
Vendor qualification (supplier certification)
Quality profiling (determining product specs to meet customer needs
Planning quality motivational programs
Process control engineering—QA department
Engineering department
QA department
Quality training
QA in no. 1, no. 2, lot analysis, instrument calibration, and aging checks
Production engineers on quality
Turnaround planning—Equipment (quality-related scheduled maintenance
Turnaround planning—Instruments (quality-related scheduled maintenance)
Quality task teams (special projects to rectify quality problems)
Process control engineering—Engineering department

Appraisal costs:
Acceptance inspection and test planning (planning for inspection)
Process equipment design for quality
Systems conformance (audit to verify system’s conformance)
Raw material acceptance testing
Process testing—Operators
Review production analysis data
Environmental testing (as it relates to product quality)
Quality statistics (collection of data and analysis)

Internal failure costs:

Off-grade burned
Off-grade storage with interest
Reprocessing/sold at reduced cost
Off-grade blended off-labor

External failure costs:

Partial credit issued—Customer kept product
Bulk returns
Packaged returns
Returns to other locations
Total quality costs

Prevention
Appraisal
Total control costs:

Internal failure
External failure
Total failure costs:
 Quality costs

$ 70
$ 7,150
$ 1,000
$ 170
$ 27,050
$ 740
$ 900
$ 1,050
$ 61,313
$ 70
$ 330
$ 650
$ 1,940
$ 12,500
$ 114,933

$ 100
$ 370
$ 70
$ 3,345
$ 13,300
$ 530
$ 70
$ 420
$ 18,205

$ 3,300
$ 3,200
$ 5,300
$ 210
$ 12,010

$ 760
$ 2,750
$ 3,500
$ 420
 $ 7,430
$ 152,578

75%
12%
87% $ 133,138.00

8%
5%
13% $ 19,440.00
Percentage of sales

75%

12%

8%
5%