CASE: Gold Coast Advertising (GCA)

George Stein sat in his large office overlooking Chicago's Michigan Avenue. As CEO of Gold Coast
Advertising, he seemed to always be confronted with one problem or another. Today was no exception.
George had just come out of a long meeting with Jim Gerard, head of the board for the small advertising
agency. Jim was concerned about a growing problem with lowered sales expectations and a decreasing
customer base. Jim warned George that something had to be done quickly or Jim would have to go to
the board for action. George acknowledged that sales were down but attributed this to general
economic conditions. He assured Jim that the problems would be addressed immediately.

As George pondered his next course of action, he admitted to himself that the customer base of GCA
was slowly decreasing. The agency did not quite understand the reason for this decrease. Many regular
customers were not coming back, and the rate of new customers seemed to be slowly declining. GCA's
competitors seemed to be doing well. George did not understand the problem.

What Do Customers Want?

GCA was a Chicago-based advertising agency that developed campaigns and promotions for small and
medium-sized firms. Its expertise was in the retail area, but it worked with a wide range of firms from
the food service industry to the medical field. GCA competed on price and speed of product
development. Advertising in the retail area was competitive, and price had always been important. ...

Answer 1. CEO of Gold Coast Advertising agency, George Stein, measures the quality only on the basis of
price and speed of product development. He must have to keep in mind that costumers want quality of
work as well. In his perception, customers only want quick and cheap work. That might be the case that
his company is losing customers. Due to this misunderstanding on how his customers define quality,
there will be a need for his company to ask his customers what type of quality they need. Int his manner
they will be able to compete with other companies.

Answer 2. To identify the quality dimensions, George Stein should use one of the quality control tools.
Out of the seven tools, Scatter Diagrams will be the best for quality analysis in this scenario. As Scatter
Diagrams show the relationship between two variables, so we can relate the quality dimensions of GCA’s
customers. In this way George Stein will actually find what his customers need
3. Develop a short questionnaire to be filled out by GCA's customers that evaluates how customers
define quality.

1. How would you rate our service based on total satisfaction?

[12345]

2. How well were your time constraints met?

[12345]

3. How likely are we to earn your business in the future?

[12345]

4. Have you used Gold Coast Advertising services previously?

[Y/N]

5. Do you have any other comments about your experience?

2. Offer suggestions to George Stein on ways of identifying quality dimensions GCA's customers
consider important.

Gold Coast needs to use the Plan-Do-Study-Act cycle into gathering information from their customers.

They can send out surveys to better understand what the customer wants in quality.

After, they should use quality function deployment to implement the information from the surveys to
better the company.

1. What is wrong with how Gold Coast Advertising measures its quality? Explain why Gold Coast
should ask its customers about how they define quality.
Up until now, Gold Coast Advertising has been focused and competed on speed and price of product
development as a measure of quality. This way of defining quality does not look at what the customer
thinks is quality. Gold Coast Advertising should ask its customers what they think quality is because that
way they will have a Customer-Defined quality instead of a predefined standard of quality.

Summary

George Stein is the CEO of Gold Coast Advertising, a Chicago based advertising agency. Gold Coast is an
advertising firm that has competed on cost and time, working with smaller firms. He has noticed a
decrease in sales and a smaller customer base. Gold coast hasn't been focused on what the customers
think of quality but instead their idea of quality. George Stein is looking to collect customer feedback to
adjust their services to meet customer needs.

Issue: Gold Coast Advertising is an advertising agency in Chicago. Their expertise is developing
campaigns and promotions in retails but also work in other firms such as food industry and
medical field. Gold Coast Advertising focuses on price and speed as their strengths compared to
other competitors. They measure their quality of service at cost and time, which they believe are the
most important strategies in the competitive advertising industry. The company provides low cost
services compared to other advertising companies. Also, they focus on time that is the amount of time
customers have to wait for the service. They deliver their services on time as customers
requested. However, their business is not doing well anymore since many regular customers are
not coming back. Obviously, there are some issues in the company that need to b e r e so lv e d . Fi rs t ,
o n e o f t h e i ssu e s o f G o ld Co a st A d ve r t i si n g is t h a t t h e y h a ve la c k o f connection with their
customers, which is extremely important in the business world. A service company that produces
intangible product, the service of product is defined by perceptual factors. In order to know what
consumers’ wants and needs, the company’s focus ha s to be on it s cu sto me rs. I nd ee d,
q ua lit y is d ef ine d as me et in g o r e xce ed in g cu st o me r expectations through market surveys,
customer interviews, feedbacks and evaluations. While the goal of customer focus is to identify
and meet customer needs, Gold Coast Advertising d o e s n ’ t h a v e t h a t f e a t u r e i n o p e r a t i n g
t h e i r b u s i n e s s . R e s u l t i n g t h e c o m p a n y d o e s n o t un de rst an d th e ir cu st o me rs’
me a su re me n t s o f q ua lit y. Se con d , G o ld Co a st A dve rt isin g co m p e t e s w it h o t h e r
a d v e r t i si n g co m p a n i e s a t p ri ce t h a t is a g o o d st ra t e g y wh il e d o in g business.
Consumer’s first attraction is always low price. For example, consumers always compare the
prices between different airlines when they book a flight. That is the reason why low price is a
main factor in providing consumers products or services. However, quality of product or
service is also very important. Especially, Gold Coast Advertising Company’s expertise is
in the retail industry, where styles and fashion are short-lived, company needs to keep updating the
current trends and focus on continuous improvement.

In this case study it seemed gold coast advertising at one point seemed to have a grasp on advertising for
an array of small and medium firms. However, over time their customer base was declining and they were
not getting many new customers either. This is due to the fact that what George Stein saw as quality was
no longer what the customers saw as quality. George Stein was a CEO that figured things would work
themselves out in the end, and that was the biggest mistake of all. Gold Coast Advertising measured its
quality on price and speed of product development. Although, those are key operations in being
competitive quality and flexibility also play a major role. GCA dealt with many firms in many industries so
for them to be more effective they would have to be a lot more flexible. The quality of advertising a
product for someone in the medical field would not be the same for someone in the retail or food service
field. It seemed George Stein didn’t realize the differences in what quality meant to the customers in the
different fields that they worked. For instance, when advertising for retail it is alot faster because it is
what’s trendy at the time and advertisements roll in and out. However, if advertising for the food service, it
would be more about quality than speed. It would be a smart Idea for GCA to ask its customers about
how they define quality because every field is going t
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CASE: Delta Plastics, Inc. (B)

Jose De Costa, director of manufacturing at Delta Plastics, sat at his desk looking at the latest production
quality report, showing the number and type of product defects per week (see the quality report in Delta
Plastics, Inc. Case A, Chapter 5). He was faced with the task of evaluating production quality for products
made with two different materials. One of the materials was new and called “super plastic” due to its
ability to sustain large temperature changes. The other material was the standard plastic that had been
successfully used by Delta for many years.

The company had started producing products with the new “super plastic” material only a month earlier.
Jose suspected that the new material could result in more defects during the production process than the
standard material they had been using. Jose had been opposed to starting production until R&D had fully
completed testing and refining the new material. However, the CEO of Delta had ordered production
despite objections from manufacturing and R&D. Jose carefully looked at the report in front of him and
prepared to analyze the results.

Case Questions

Prepare a 3-sigma control chart for both production processes, using the new and standard material (use
the quality report in Delta Plastics, Inc. Case A, Chapter 5). Are both processes in control? What can you
conclude?

Are both materials equally subject to the defects?

Given your findings, what advice would you give Jose?

The Delta Plastic report provides the type of defect and the number of each defect per day. The
report did not provide detailed information on the number of samples taken or the total production.
Since no sample size ratio is given, it is impossible…

ER 2 If we take a look at the control charts for both the processes, you will notice that
both processes do not have any control over the amount of defects will be produced.
Both the charts have many defect numbers which are placed on either side of the
control limits. It can also be noticed that the defects out of the new material process
seem to become greater with every day of production. This clearly shows that the
standard material holds up better during the manufacturing process compared to that
of the super plastic during production (Reid & Sanders, 2011). The old process shows
that the process is in control because the sample data falls within the normal variation
range. The super plastic is not in control because the cause for the variation can not be
identified. Those causes can not be eliminated until the cause of the variation is known.
Control charts is a toll used to decide if a business or manufacturing process is in
statistical quality control consist of three areas. Descriptive statistics which describes
the quality characteristics; statistical process control consists of random sampling of
the product; acceptance sampling is the process of randomly inspecting a sample of
goods and deciding if the entire lot should be accepted. Control Charts are beneficial
because it will show the probability of a point falling above the upper limits or falling
below the limits. If the data falls outside of the control limits then we can assume that
the process is out of control which will flag and prompt reasonable cause to look into
what has caused the defect to

Identify the important facts surrounding the case

Delta does business globally in 503 cities in 94 countries and is the third largest airline
in the United States. In 2003, Delta 's daily needs included 7.3 million gallons of fuel,
109,000 meals and snacks, 151,000 bottles of water, 87,000 cans of soda, and 219,000
pounds of ice. Its daily operations also required large amounts of information relating to
such areas as flight schedules, gate information, baggage handling, customer service,
and tower operation. To be competitive in the airline industry, Delta required an efficient
flow of operations. However, accurate advanced planning is nearly impossible because
of such elements as changing economic realities and weather conditions, and
unexpected maintenance issues.
Delta Air Lines operates in a competitive industry. Amongst its competitors, its two
largest were American Airlines and United. To survive in the industry it was necessary to
employ and maintain technologically efficient and cutting edge systems. However, Delta
systems of operations were mainly paper based; they still used pneumatic tubes to
move information and they made little use of the internet. As a result, the company
lacked a competitive edge. The technology it had was based on various departments
independently purchasing the technology they needed and hiring their own IT staff. In
1996, Delta was still known for its expensive airfares, poor service, limited leg room on
flights and use of out-dated inefficient processing systems.
The airline industry became increasingly competitive with the arrival of the low-cost
carriers, such as, JetBlue, Southwest, and Airtran. These competitors were taking
customers away from the major airline companies. Delta projected that 40 percent of
their customers chose low-cost carriers, which was a higher percentage than any other
airlines. During 2002, 80 percent of Delta 's New York to Florida market was taken away
by JetBlue. Eventually, Delta 's monopoly
Continue Reading
Statistical process control constitutes tools like three sigma control charts or the process-behavior charts.
These charts also known as Shewhart charts so called on the name of its inventor Walter Shewhart.
Shewhart chart is a statistical tool for monitoring and controlling quality of manufacturing process. Thus, a
control chart is a graphical representation of some process measurement functions against time. It was
later extended by W. Edward Deming to the total quality improvement in all areas of an organization.
It is being utilized by the Delta Plastics Inc. to analyze and determine whether the production process of
plastic products is in a state of statistical control or not . Howsoever controlling of the production process
is found to receive variations that exist in the output and its measurement. The variations occur due to
random or special causes. If the variation is due to random causes alone, the process is said to be in-
control.
The control chart helps in detecting and understanding presence of special causes of variation. In order to
deal and tackle defects in the products and to make quality products available to the consumers, the
control chart for product so prepared by standard material and for product prepared by super plastic
would help in understanding the areas to be focused and controlled.
For making use of control charts, firstly the process parameter which needs to be monitored is identified.
According to target value for the parameter under consideration, centerline of the plot is made. The
process measurements are divided into samples by time. The points which represent some function of the
process measurement within each group aids in estimation of the target value. The points plotted on the
graph are compared to a pair of control limits.
The 3-sigma control chart prepared for the standard material clearly gives the reflection of the process
that can be...

Delta Plastics, Inc. was a designer and manufacturer of household plastics. They sold their products through
merchandise retailers and were well known for their high quality products.
Delta’s R&D group was always looking for ways to develop new products and they finally had one. The new plastic
material they developed could withstand hot and cold temperatures so it was perfect for kitchen ware because you
could take it out of the oven and move it directly to the refrigerator without the plastic cracking. Delta’s marketing
team was very eager to get this new plastic out on the market because than they would be the first company to
market this great invention.
On April 28th Isabelle Harrison, director of R&D stated in the meeting that was held prior to the “super plastic”
going into production was the plastic even though durable still needed to be fined tuned. Mr. Chadwick, director of
manufacturing disagreed because he wanted to get it out on the market before another company cornered it. Jose,
director of manufacturing sided with Ms. Harrison. The final decision was made by Jonathan Fine, Delta’s CEO. He
stated that since the product was safe, the “super plastic” would go into production. About a month later problems
began in production of the “super plastic”. Jose was getting weekly defect reports on the new product. He knew he
had to conduct an analysis of the new plastic and the standard plastic but he was nervous about what the results
would show.
Answers to the case questions
1. Mr. Chadwick was not correct when he said that since the “super plastic” product was safe it should be put into
production because their were defects that started happening after production began. In weeks 1-4 the new plastic
came out with many cracks and air bubbles which the old plastic did...

DELTA PLASTICS, INCORPORATED

Prepare a 3-sigma control chart for both production processes, using the new and standard material (use
of quality report in “Delta Plastics, Inc, Case A,” Chapter
The quality report for the Delta Plastic case in Chapter 5 list the number of defects found over the last 4
weeks for both types of plastic and for 5 types of defects. As these are defect counts, the appropriate
chart type is a C-chart. Of the 5 defect types, cracks and air bubbles seem to be the most serious. Below
are C-charts for these two defects for each plastic type. For C-charts the center line is the average
number of defects per period (in this case, days) and the limits are:
UCLc =
LCLc =
therefore
UCL Cstd = 6.3
LCL Cstd = -2.2
UCL Bstd = 7.7
LCL Bstd = -2.26
UCL Csup = 11.1
LCL Csup = -1.8
UCL Bsup = 9.2
LCL Bsup = -2.1
As the counts cannot be less than zero, use zero for all negative lower control limits.
The first three carts are in control. All observations are positive and below the upper control limits.
Further, none shows a trend. The chart for bubbles with the super plastic should be considered out of
control. Even though all observations are within limits, the chart shows a clear increasing trend in defect
counts.
Discuss whether or not both processes are in control and what conclusion may be drawn.
Being in control does not tell the whole story. While the crack counts for the super plastic may be stable
(in control), they are also much higher than the standard material.
Discuss whether or not both materials are equally subject to defects.
As observed above, the Super Plastic has more defects than the standard plastic, primarily in terms of
cracks and scratches.
Given your findings, advise Jose on the action he should take.
Clearly, manufacturing has problems with the new Super Plastic. The number of crack and bubble defects
are higher with the Super Plastic when compared to the Standard...
Introduction
Delta Plastics is an industry leading manufacturer of consumer household plastic containers for kitchen
use. Delta Plastics products are distributed through a network of merchandise retailers. Delta’s R&D
group recently invented a ground breaking new plastic, which would revolutionize the plastic industry. Due
to the enormous investment in the new plastic product, quality control will play a pivotal roll in the
continued success of the company. “Total quality management (TQM) is an integrated organizational
effort designed to improve quality at every level. It means meeting and exceeding customer expectations
by involving everyone in the organization through an integrated effort.” (Reid & Sanders, 2010, p. 137) In
this paper, I will discuss the organizational benefits of TQM and the current quality control process,
explore quality control tools and defects, and recommend a quality control process.
Delta Plastics, Inc. would benefit from a Total Quality Management Program the company has a long
history of designing plastic containers, primarily for kitchen and household usage. They are looking to
increase brand recognition and market shares but they are using the R&D group to achieve this new
project. The R&D group has developed a new plastic material that claims to tolerate rapid changes in
temperature from heating to deep cooling. However, the question is whether or not this new product will
stand up to the claim. A Total Quality Management program would help them promote the sales of the
containers while making sure the product stands up to the claim that it will tolerate rapid changes in
temperature.
Thhe current quality control process is under scrutiny by Jose De Costa, director of manufacturing. Mr. De
Costa is questioning the susceptibility of cracking, but the director of marketing is stating that...

Definition of Quality 
 On the basis of effective analysis of case on Delta Plastics Inc., subsequent definitions of quality
are as followed which are adhered by the four main players of Delta Plastics Inc.:  
 According to Isbelle Harrison, director of R&D, quality is defined as modification and
improvement in the characteristics of new material. At the other hand, Jose De Costa, director of
manufacturing defined the quality in other perspective (Case: Delta Plastics Inc. n.d., p. 180).
According to Jose De Costa, quality is defined as no unexpected defects should occur during
production. 
  In contrast, quality was defined by George Chadwick, director of marketing as to protect the
organizational product and its design from competitors and imitators. In favor of George
Chadwick, CEO of Delta, Jonathan Fine defined quality on the basis of product safety in the
market (Case: Delta Plastics Inc. n.d., p. 180). He argued about the quality that if product is safe
in market then small problems of production can be handled.    
Rationale 
According to my opinion, the rationale for each main players of Delta Plastics Inc. is as follow:  
 As R&D director, Isabelle Harrison is responsible person for improving or modifying the
characteristics of new material and he is liable for any issue regarding the characteristics of new
material (Reid & Sanders, 2010). So, he favors for more product testing to improve quality of
new material. Similarly, as manufacturing director, Jose De Costa is responsible to produce zero
or minimum defects products (Ronen & Pass, 2007). So, he is right in his view about quality
dimension to minimize product defects.
In the similar way, marketing director is responsible to generate organizational revenue
with customer satisfaction. For this purpose, to protect the organizational products from
competitors or imitators is necessary. So, marketing director George Chadwick focuses to satisfy
the customers and organization growth through unique products and countering from competitors
(Wadsworth, Stephens & Godfrey, 2008). The view of CEO, Jonathan Fine is right that
organizational growth is also necessary and product can be improved through practical
experience. As my rationale for each employee, all employees are right at their positions.      

Defect Analysis in Quality Dimension 

By using checklist as quality control tool, defects in the quality dimensions among the super
plastics and standard material are analyzed. On the basis of case study, particular defect list of
standard material and super plastics (new material) are as follow:   

 
In checklist, common defects and number of observed occurrences are listed. With the
help of list, quality dimension is identified. Similarly, according to above checklist, standard
material is more qualitative in comparison to super plastics (Ronen & Pass, 2007). Small R&D
efforts are needed in standard material for improving quality dimension in comparison to Super
plastics.
Super Plastics has more defects such as uneven edges, cracks and air bubbles as
compared to standard material. Due to this reason, director of R&D should devote her time ore in
research testing for quality improvement of super plastics (Wadsworth, Stephens & Godfrey,
2008). According to checklist, defects data about thickness variation and scratches represents
that standard material should utilize R&D to improve material quality.
Recommendation 
Based on the findings, it is identified that Delta plastics Inc. can minimize or reduce defects by
using effective quality control strategy. On the basis of findings, Delta Plastics Inc can improve
its operations and processes by using two quality control strategies such as checklist and cause-
and-effect diagram (Reid & Sanders, 2010). Checklist will assist to identify and collect the
information about the facts and reasons of defects. By getting information about defects, it can
be reduced or eliminated in an effective manner (Ronen & Pass, 2007).
By using checklist, operations or rate of defects can be judged. The list of particular
defects will assist to provide clear picture about operations and process (Reid & Sanders, 2010).
It will assist to identify and implement effective quality control tools and techniques that will
improve operational efficiency (Case: Delta Plastics Inc. n.d., p. 163).
As quality control tool, cause-and-effect (fishbone) diagram can be used. With the help of
this diagram, quality problem can be resolved due to its nature to identify potential causes of
particular quality problem (Case: Delta Plastics Inc. n.d., p. 162). By using this tool, proactive
causes can be explored with the help of brainstorming (Reid & Sanders, 2010). It will assist to
identify causes of using old equipments, poor supervision, fatigue and poor quality. Thus, quality
of material can be improved by Delta Plastics Inc by using cause-and-effect diagram as a tool of
quality control.
With the help of cause-and-effect (fishbone) diagram, backbone of quality can improve
through the support of each and every process and operation (Oakland, 2003). The subsequent
cause-and-effect diagram represents clear picture that will assist to resolve quality problem of
Delta Plastics Inc.  
          (Source: Case: Delta Plastics Inc. n.d., p. 164)

Benefits from TQM Program

An organization can get competitive advantage with the help of effective total quality
management (TQM) programs. In current market trend, most of customers prefer to purchase
zero or minimum quality defect products. For quality assurance to customers, TQM program
plays an important role (Wadsworth, Stephens & Godfrey, 2008). It leads to provide better
customer care and assists to greater customer satisfaction. The increase in satisfied customer base
leads to gain competitive advantage in the marketplace.
At the other hand, the organization can sustain the advantage of TQM for organizational
growth. It assists to motivate employees due to increase in their productivity and operational
efficiency (Wadsworth, Stephens & Godfrey, 2008). TQM program leads to inspire employees
due to improvement in learning and skills through training sessions (Webber & Wallace, 2006).
At the same time, it also assists to reduce product or material defects that will assist to save
organizational cost.
TQM program can be beneficial to an organization for long term organizational
sustainability due to continuous improvement in organizational operations and processes
(Oakland, 2003).    

The Problem

Comparison analysis between Quality of Standard Material and Super Plastic (New
Material)

Introduction

-Delta plastics founded in 1991

-HQ in Hot Springs, Arkansas

-2005, Delta Plastics, Inc. is a subsidiary of Rexam.

Analysis

Company background

standard material

-the most defective area is air bubbles, followed by scratches and cracks, uneven edges
and lastly thickness variation.

“super plastic” material

-the most defective area is cracking, followed by air bubbles, uneven edges, thickness
variation and lastly scratches.

-specialized in the designs and manufactures plastic

-industry leader and aggressively looking to increase brand recognition and market
share.

High quality product

-R&D group to develop new plastics materials and new product designs.

Video On

"how plastic are made"

The Product

The decision

 director of R&D and director of manufacturing were more focused on quality before it can
be produce.

-concerned with fine tuning the characteristics of the new material.

-product testing on the new material need to be tested to prevent unexpected defects

-concerned on company reputation

 director of marketing and Delta’s CEO were not as concerned definitions of quality.
They were more concerned :

-To be the 1st enter into market and sell the new material before any of the competitors.

-product was marketable and would make money for the company.

3. Internal Failure Cost

 Increase manufacturing efficiency --Waste reduction

Reduce product cycle time

4. External Failure Cost

 Improve customer service

 Reduce product return
 Improve customer loyalty

Question 2

Question 3

Question 1

Use one of the quality tools described in the chapter to analyze the defects in the case.
How do the quality dimensions differ between the two materials? Are there more defects
associated with the super plastic versus the standard material?

Given your findings, what should Jose do?

Delta Plastics, Inc

Answer – Q2

Pareto Analysis

 to identify quality problems based on their degree of importance

 to identify ways to measure variation in manufacturing processes, generate statistics
based on these measurements
 use those statistics to ask new questions about the sources of quality problems
 One way to use Pareto analysis is to develop a chart that ranks the causes of defects in
decreasing the quality of the product

Identify the different costs of quality described in the case.

Explain the trade-offs that Delta made in their decision between the costs of quality.

Was George Chadwick (Marketing Director) correct that conducting more tests was
unnecessary?

Six Sigma

 The implementation of Six Sigma is expected to improve Delta Plastics operations by

reducing the cost of quality in the following areas:

1. Prevention Cost

 Data analysis before decision making

 Increase Employee motivation
 Develop cross functional team.

2. Appraisal Cost

 Improve Time management

 Improve database decisions
 Speed up introduction of new product to the market.

Answer – Q3

 We recommend that Jose should emphasize on Total Quality Management (TQM).

 -sets the direction for the firm and the level of commitment.
 TQM is a set of management practices throughout the organization, geared to ensure
the organization consistently meets or exceeds customer requirements.
 TQM places strong focus on process measurement and controls as means of continuous
improvement.
 - Strengthen the R&D for the new product (e.g.: Material used, process & ingredient
used)
 Important aspects of TQM include customer-driven quality, top management leadership
and commitment, continuous improvement, fast response, actions based on facts,
employee participation, and a TQM culture.

Answer -Q1

ii) Internal Failure Costs.

 Scrap
 Rework
 Re-inspection
 Re-testing
 Material review
 Downgrading
iii)External Failure Costs.

 Processing customer complaints

 Customer returns

This decision leads to poor quality product. Overall, there are two situations had arisen
from the decision made:

A) Bear the cost of additional new product testing

 i)Prevention Costs. Example of the cost:

 New product review
 Quality planning
 Supplier capability surveys
 Process capability evaluations
 Quality improvement projects

For the conclusion,

 The main objective of the company which is to produce the quality product or the
customer. If Rapidly produce the new product there will be a lot of disadvantages which
is
 Reduce the degree of loyalty of the customer
 The company’s goodwill will be affected
 Competitors will use this failure to overtake the market.
 Unable to sustain the long run in the market.
 So we disagree with the decision made by the marketing director and CEO of the
company for not conducting more test was unnecessary.

Cost of Quality in the case includes:

 Prevention Cost – costs associated with reducing the potential for defective parts or
services
 Appraisal Cost – costs related to evaluating products, processes, part and services.
 Internal Cost – costs that result from production of defective parts or services before
delivery to customers.
 External Cost – costs that occur after delivery of defective part or services.

The "Cost of Quality" isn't the price of creating a quality product or service. It's the cost
of NOT creating a quality product or service. Every time work is redone, the Cost of
Quality increases. Examples include:

 The reworking of a manufactured item.

 The retesting of an assembly.
 The rebuilding of a tool.
  The reworking of a service, such as the reprocessing of ordering the raw material from
the suppliers

B) Rapidly produce the new product.

i) Appraisal Costs.

 Incoming and source inspection/test of purchased material

 In-process and final inspection/test
 Product/process audits
 Calibration of measuring and test equipment
 Associated supplies and materials

 Delta Plastics, Inc. must constantly focus on the customer needs and wants and
continue to gather information.
 so that they understand the needs of the customers in order to give them what they
desire.
 In order to achieve total quality management
 the company and employees must focus on the definitions of quality in order to produce
the best product possible.