Qht1 Task 1

In: Business and Management

Submitted By jennamskinner
Words 485
Pages 2
Memo To: | Supervisor, ABC Company | From: | Jenna Skinner | cc: | Assistant Supervisor, ABC Company | Date: | June 22, 2016 | Re: | Quality Considerations | | |
As you are aware, our consumers expect a certain level of quality from the products that we produce. This level of quality helps gain an advantage over our competitors and keeps our business growing.

In order to maintain this level of quality we have come to be known for, we must consider the three main costs associated with producing quality products. The three types of costs associated with quality consideration are appraisal costs, failure costs, and prevention costs. I would like to bring these to your attention and explain more about each of these costs. I will also explain my analysis for potential trade-offs for costs incurred in these categories.

Failure costs can be both internal and external. Internal failure costs occur when defects are discovered and corrected prior to our product reaching the customer. These costs arise when our quality of work fails to reach the standards our customers require and need to be corrected. There are a number of factors that contribute to internal failures such as reworking the product and starting over, cost of finding the issue, employee injuries , etc. External failure costs are ones that are uncovered after the product has reached our customer, and are much more damaging in terms of costs. These external failure costs include customers returning the items, warranty claims, and liability claims.

Appraisal costs are those related to testing, inspecting, or other events that lead to the discovery of defects with our products so that we are confident we are providing the best products possible for our customers. These costs include the hiring of inspectors, testing our products, the equipment required for testing, audits, etc.…...

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