A cost of quality improvement programs Many organizations will have true quality-related costs as high as 15-20% of sales revenue, some going as high as 40% of total operations.

A general rule of thumb is that costs of poor quality in a thriving company will be about 10-15% of operations. Effective quality improvement programs can reduce this substantially, thus making a direct contribution to profits.

The quality cost system, once established, should become dynamic and have a positive impact on the achievement of the organizations mission, goals, and objectives.

As a practicing Industrial engineer, you are therefore required to solve the cost of quality opportunities of improvement in your organization (or organization of your choice) focusing on the following:

1. Developing the organizational quality cost system.

2. Identify the organization costs of poor quality (Preventive, Appraisal and Failure).

3. Conduct the analysis of costs of poor quality.

4. Identify the costs of good quality.

5. Identify opportunities for improvements.

6. Recalculate the revised costs

7. Recommendation and conclusion