INVESTIGATING THE RELATIONSHIP BETWEEN QUALITY AND COST OF QUALITY IN A WHOLESALE COMPANY

Abstract

The objective of this research is to extend understanding of variables that impact quality and cost of quality. The Prevention-Appraisal-Failure (PAF) model is employed to evaluate the cost of quality (COQ) and to determine the level of quality that minimizes the total COQ. The PAF models are developed in the framework of three major operational inputs; material, machine, and labor; the model is as well expanded for the company as one. It provides a conceptual view of the cost of quality and quality perspectives for researchers and practicing managers. The result confirms that the quality enhances along with the failure cost decrease as a result of increasing in appraisal cost plus prevention cost. Finally, it provides critical suggestions for investments in appraisal and prevention activities for material, machine and labor to minimize total cost of quality and to accomplish a satisfactory level of quality.