There are basically only two ways to reduce defects and the resulting costs of internal and external failures. Either the defects can be prevented or…

Generally speaking, companies should focus more effort on prevention and appraisal. And prevention is usually better than appraisal. Most authorities agree that the costs of…

Quality consultants claim that top managers often do not pay enough attention to quality since the costs of low quality (i.e., high defect rates) are…

The costs of non-conformance (i.e., defects) often cut across departmental lines and are therefore somewhat difficult to collect. Moreover, some of the costs of nonconformance…

It is very helpful to sort the various quality costs into the four categories of prevention, appraisal, internal failure, and external failure costs. By comparing…

A company’s first quality cost report probably has the greatest effect. Managers are often surprised by the magnitude of the costs associated with defects. This…

Both net operating assets and gross operating assets can be used. If net operating assets are used, plant and equipment will be included after subtracting…

Anything that causes one of the variables in the numerator to increase (relative to the denominator) or one of the variables in the denominator to…

This method seeks to overcome some of the deficiencies of the ROI method. It allows investment proposals to be accepted as long as they increase…

The typical format for a Case Study in CMA1 and CMA2 consists of a memo 3 to 6 pages including schedules that is generally prepared…