Cost of Poor Quality (COPQ)

Cost of Poor Quality (COPQ) - The costs associated with providing poor quality products or services. There are four categories: internal failure costs (costs associated with defects found before the customer receives the product or service), external failure costs (costs associated with defects found after the customer receives the product or service), appraisal costs (costs incurred to determine the degree of conformance to quality requirements) and prevention costs (costs incurred to keep failure and appraisal costs to a minimum). (ASQ definition)

[Category=Data Governance ]

Source: The Data Governance Institute, 23 November 2009 08:01:45, http://www.datagovernance.com/glossary-governance/

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Cost of Poor Quality (COPQ) - The costs associated with providing poor quality products or services. There are four categories: internal failure costs (costs associated with defects found before the customer receives the product or service), external failure costs (costs associated with defects found after the customer receives the product or service), appraisal costs (costs incurred to determine the degree of conformance to quality requirements) and prevention costs (costs incurred to keep failure and appraisal costs to a minimum).

[Category=Quality ]

Source: American Society for Quality, 15 September 2010 09:18:23, http://www.asq.org/glossary/

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Cost of Poor Quality - COPQ - COPQ consists of those costs which are generated as a result of producing defective material.

This cost includes the cost involved in fulfilling the gap between the desired and actual product/service quality. It also includes the cost of lost opportunity due to the loss of resources used in rectifying the defect. This cost includes all the labor cost, rework cost, disposition costs, and material costs that have been added to the unit up to the point of rejection. COPQ does not include detection and prevention cost.

See also Cost Of Non-Conformance (CONC).

COPQ should contain the material and labor costs of producing and repairing defective goods, you can include a portion of the appraisal cost if you have an inspection point, but never should you include prevention costs.

COPQ - Suppliers

Cost of Poor Quality from Suppliers

Suppliers can generally affect our cost due to:

   a) Producing defective material.
   b) Damaging material during delivery.

Our COPQ will generally cover the followings:

   1) Cost of labor to fix the problem.
   2) Cost of extra material used.
   3) Cost of extra utilities.
   4) Cost of lost opportunity

   a) Loss of sales/revenue (profit margin)
   b) Potential loss of market share
   c) Lower service level to customers/consumers

[Category=Data Quality ] 

Source: iSixSigma, 11 January 2011 09:15:33, https:web.archive.org/web/20111109014246/http:www.isixsigma.com/index.php?option=com_glossary