ACC336: Chapter 14 - Quality and Environmental Cost Management
Terms in this set (13)
What is the average cost of quality?
15-25% of sales
What is the optimal cost of quality?
2-4% of sales
What is an essential part of any quality improvement program?
Reporting and measuring quality performance so managers know what quality costs are and how they change over time
What is needed to measure costs of quality?
An operational definition of quality
A product which meets or exceeds customer expectations
Quality of conformance
Conforming to the design requirements of the product
What elements may make up customer expectations (4)?
Fitness for use
Conformance to specifications
What are the implicit attributes of a conforming product (4)?
Fit for use
A product that does not conform to specifications
A quality performance standard that requires all products to be produced and delivered according to specifications
Defines an acceptable range of vales for each specification or quality characteristic
Target value is defined and upper/lower limits are set
(units within the range are nondefective)
Robustness (robust quality view of conformance)
Exact conformance to the target value
(no tolerance/range of variation allowed)
How can improving quality increase profitability (2)?
Increasing customer demand
Decreasing the costs of providing goods/services
OTHER SETS BY THIS CREATOR
ACC456: Exam 1
FIN343: Exam 3
ACC336: Chapter 13 - The Balanced Scorecard
ACC336: Chapter 11 - Strategic Cost Management