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Companies can lose money because they fail to use
significant opportunities to improve their costs of
quality. Most cost accounting data are not revealed
to the public and are rarely exchanged among
businesses, and there is no known study testing the
effect of organization size, i.e., small and medium
enterprises (SMEs) and large organizations, on
quality costs. The study identified important
factors and measures contributing to a successful
quality cost program implementation and developed an
empirically based model for quality costs in the
manufacturing environment. The American Society for
Quality (ASQ) helped in announcement of the online
questionnaire to manufacturing and quality
professionals. ANOVA One-Way and Seven Quality
Tools were used in data analysis and interpretation.
The survey results indicated that the total quality
costs were an average 2.5-5% of sales revenues or 7-
10% of manufacturing expenses. The failure costs
were about 70-80% of quality costs; SMEs had a high
percentage of internal failure costs and large
organizations had a high percentage of external
failure costs.
significant opportunities to improve their costs of
quality. Most cost accounting data are not revealed
to the public and are rarely exchanged among
businesses, and there is no known study testing the
effect of organization size, i.e., small and medium
enterprises (SMEs) and large organizations, on
quality costs. The study identified important
factors and measures contributing to a successful
quality cost program implementation and developed an
empirically based model for quality costs in the
manufacturing environment. The American Society for
Quality (ASQ) helped in announcement of the online
questionnaire to manufacturing and quality
professionals. ANOVA One-Way and Seven Quality
Tools were used in data analysis and interpretation.
The survey results indicated that the total quality
costs were an average 2.5-5% of sales revenues or 7-
10% of manufacturing expenses. The failure costs
were about 70-80% of quality costs; SMEs had a high
percentage of internal failure costs and large
organizations had a high percentage of external
failure costs.