Premium Essay

Memo for Quality Costs

In: Business and Management

Submitted By Rustafee
Words 798
Pages 4
To: Jana Miller
Date: October 25, 2013
Re: Quality Management

Hello Jana,
I am writing to inform you about the quality costs that we will need to address within Slosh to create a continued and solid high quality of conformance. There are three types of costs associated with quality, they are failure costs, appraisal costs, and prevention costs. I will address each with appropriate explanations.
We will begin by discussing failure costs. Failure costs have two parts; internal, which are defects, delays, or machinery issues among others that take place before our products leave company grounds. The other is external costs which are costs incurred by us after our products have left our hands and are now in consumer hands. These are things such as warranty costs, and reputation costs which, unfortunately, can be substantial.
Examples on internal costs relating to Slosh happens when our machines need repair and we lose time with production, pay for employees during down time, and potential loss of product due to the machine malfunction. Once the machine is back up and running there will be a short transition to make sure the machine is producing product up to our standards. The lost product will also need to be disposed of. Another internal cost that happens is when our computers decide to malfunction. The cost to retrieve lost information and/or re-enter lost information takes more time for employees and other overhead factors. Analysis of both of these examples also takes time and extra costs to determine what has gone wrong and to decide the best course of action in fixing the root issues.
External failure costs occur after our products have left our hands and have been placed into consumer hands. As we warranty all of our products for the first year of use, this will be our main external cost. However, loss of reputation for our...

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