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Chapter 10. Measuring Quality

Product quality is an important component of profitability. Other things being equal, a product with a reputation for high quality tends to sell more units than a product without that reputation. A product with good quality suffers fewer customer complaints, fewer free service calls, and fewer warranty repairs. Poor product quality goes directly to the bottom line in the form of lost profit.

It is also true that the quality of operations drives profit margins. When customer service representatives spend too much time chatting with one customer, that means another customer is on hold, planning to buy someone else's product. When invoices are incorrect or indecipherable, there is usually a delay in receipts. When the purchasing department orders unnecessary parts from a supplier, there is an unnecessary increase in carrying costs. When the quality of goods purchased is too high, the cost of the goods is probably also too high: zero-defect manufacturing is very expensive.


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