- This topic has 2 replies, 2 voices, and was last updated 9 years ago by
.
-
Posts
-
COD Question in Kit:
Hi Ken, Hope you doing great.
Failure costs have increased from 3.46m in 2010 to 4.35m in 2011. These costs are a measure of quality costs in order to assess the productivity
It later said under the quality heading in operational performance measures that failure costs can also be used as a measure of quality AND THEY WOULD BE IMPROVED AS MEASURES IF ACTUAL COSTS WERE COMPARED TO BUDGETED COSTS.
I couldn’t understand this point, How are they going to improve as a measure when actually they have increased from the previous year ? If you can clarify please
Thanks
Failure costs increasing is not necessarily bad: production might have increased and failure costs could be proportional.
Therefore, better to compare to a budget. The budget could be set a little tighter each year to try to encourage improvement.
- You must be logged in to reply to this topic.