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1 September, 17:56

The Cost of Quality, COQ, is the difference in the cost of prevention and the cost of failure. If a quality program costs $10,000 to plan and $50,000 to administer, what is the COQ of the program reduces waste by $30,000 and returns of bad products by $40,000

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  1. 1 September, 18:07
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    The COQ is - $10,000

    Explanation:

    The COQ can be represented by the sum of two factors: Cost of Good Quality and Cost of Poor Quality.

    The Cost of Good Quality (CoGQ) includes the prevention and appraisal cost and the Cost of Poor Quality (CoPQ) includes internal and external failures.

    The formula of COQ is:

    COQ = CoGQ + CoPQ

    If

    CoGQ = $10,000 + $ 50,000 = $ 60,000

    and

    CoPQ = - $30,000 - $ 40,000 = - $ 70,000

    CoPQ values are negative because they are reductions of wate and returns of bad products

    then:

    COQ = $ 60,000 - $ 70,000

    COQ = - $ 10,000
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