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Miscellenious Essay

  • Submitted by: shanz001
  • on March 17, 2012
  • Category: Miscellaneous
  • Length: 1,593 words

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Below is an essay on "Miscellenious" from Anti Essays, your source for research papers, essays, and term paper examples.


Boman Moradian
(compiled by Ms. Shalini Sadhwani)
MMS student at JBIMS

Cost of quality         = Price of nonconformance and price of conformance.

COQ     = PONC   +   POC

PONC =     All those costs incurred because things were not done
              right the first time.

POC     =     Those costs incurred to ensure that things are done

                  right the first time.



The system probably originated in the 1940’s in Western Electric and was used as an attempt to measure the efficiency of work processes in financial terms.   The system has been around for some 40 odd years but has not been successfully implemented by many organisations.

In any company, the total operating costs can be broken down into:
        - PONC
        - POC
        - Error-free costs

Error-free costs include all expenses incurred for operating processes as they were designed, assuming no planned waste; rework or non-conformance was part of the design. Expenses the word include those for materials, labour, equipment, plant, officer energy, etc.

The cost of quality typically runs at 10 to 30% of sales in manufacturing companies and 20 to 50% of operating costs in service companies.

The cost of quality is not an accounting system

The cost of quality is a communications tool and should not be viewed as a classical accounting system. An analogy may help to make this clear. You are walking down the street and, unprovoked; a maniac fires a shotgun at you. You fall to the ground, alive, but seriously wounded and bleeding from numerous perforations. The accountants and quality specialists would try to devise a system of counting precisely the number of red blood corpuscles that you are loosing. The cost of quality specialist (doctor) simply wishes to know roughly but with some accuracy and consistency, where the worst leaks are so that he can plug them fast. In the first...

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  • Submitted by: shanz001
  • on March 17, 2012
  • Category: Miscellaneous
  • Length: 1,593 words
  • Views: 645
  • Popularity Rank: 124714
  • 1 rating(s)

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