Data for the Quality Cost Report

Cost evaluation of a two-echelon inventory system with lost sales and approximately Poisson demand [An article from: International Journal of Production Economics]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 are entirely external to the firm and are not captured by the accounting system at all. The most prominent example of this is the cost of lost sales. Nevertheless, as we indicated above, precision is not terribly important so these measurement and identification problems should not be overemphasized. All of the examples and problems in the text assume that the data collection work has already been done.