Quantification of Cost of Quality: A Case Study in an Ethiopian Apparel Manufacturing Factory

Authors

  • Monika Panghal Ethiopian Institute of Textile and Fashion Technology https://orcid.org/0000-0003-3062-7755
  • Sandeep Prasad Ethiopian Institute of Textile and Fashion Technology
  • Shumet Tilahun Ethiopian Institute of Textile and Fashion Technology

Abstract

Cost of quality (CoQ) is considered as a growth signal in determining the complete performance of the organizations. The objective of this case study was to quantify the CoQ in a representative export-oriented small-scale factory based out of Addis Ababa, Ethiopia, which was on the verge of losing export buyers because of its high operational cost and unacceptable quality standards. The researchers conducted an in-depth study of the quality-related activity costs incurred to produce a product right from the product development stage to the final packing stage. The costs were segregated as per the sub-activities falling under the purview of COGQ and COPQ following the guidelines as provided in the ABC model of CoQ calculation. The results were startling, with 23 % of the sales revenue incurred against the CoQ. The preventive cost, appraisal cost, internal failure cost, and external failure cost were 4.8 %, 10.2 %, 7.4 %, and 0.54 %, respectively. The quantification of quality-related costs can prove to a beacon light for factories who want to be competitive globally.

Author Biographies

  • Monika Panghal, Ethiopian Institute of Textile and Fashion Technology
    Apparel Production, Lecturer
  • Sandeep Prasad, Ethiopian Institute of Textile and Fashion Technology
    Apparel Production, Lecturer
  • Shumet Tilahun, Ethiopian Institute of Textile and Fashion Technology
    Apparel Production, Lecturer

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Published

2022-03-03

Issue

Vol. 12 No. 3 (2022)

Section

Scholarly Articles

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