The Business Case for Design for Six Sigma by Perry Randy C

Author:Perry, Randy C....
Language: eng
Format: epub
Published: 2014-03-29T02:34:57.589000+00:00

The Cost of Poor Quality

After further investigation, the marketing and technical groups were able to resolve the potential fatal flaw with the new CWF product. As the commercialization effort for the product has continued, management has become concerned with the projected Cost of Poor Quality (COPQ) for the product. As a result, you and your team have been asked to conduct an analysis of this cost and to review it with management as soon as possible.

As we begin this new assignment, we have one piece of critical information from the prior work that was done on this project. We know from that work that the projected yield for the product is 90%. Therefore, we of course know that 10% of the production is projected to be waste. For the purposes of this case study, we assume that this waste material cannot be upgraded through reprocessing and is therefore not sellable. We also assume that the waste material has no disposal cost, which is normally not the case in real life.

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