An examination of the relationship between conformance and quality‐related costs

Reports the results of a case study which undertook to examine the relationship between conformance and quality‐related costs. The controversial Lundvall‐Juran economic quality level (EQL) model has been criticized by various authors due to its acceptance of imperfect quality. While persuasive, this emotional aversion to imperfection does not provide a convincing critique of the EQL model. However, the EQL remains widely used in practice. Argues that several assumptions of the EQL model should be questioned including monotonicity, continuity, the positive relationship between prevention/appraisal costs and conformance, the negative relationship between failure costs and conformance, and the combining of costs. Further, the EQL model illustrates a single contingent relationship between quality costs and conformance. Provides several alternative cases of the relationship between quality costs and conformance. The results are then reported and the underlying relationships of the EQL model tested. The results showed that prevention and appraisal costs were positively and significantly associated with conformance. Failure costs were also positively and significantly related to conformance. These results provided support for a contingency view of quality‐related costs.