A revised model for the cost of quality

Traditionally, process improvement is considered a defect prevention effort. Current cost models consider the coupled effect of both prevention and appraisal costs on the cost of failure. This paper proposes a new model for the cost of quality, which captures the value of continuous process improvement in achieving economic operation. The model is developed to incorporate two cost functions. The first accounts for quality related costs incurred while maintaining a stable level of operation, while the second accounts for the cost of process improvement. Using incremental economics, the two cost functions are assembled and an economic criterion for evaluating improvement alternatives is developed. Numerical examples are used to illustrate potential applications and performance of the model.