Cari and Jeremy just bought a bed and breakfast inn at a very attractive price.The business had been doing poorly.Before they reopened the inn for business,they attended a seminar on operating a high-quality business.Now that they are ready to open the inn,they need some advice on quality costs and management.
Required: Identify four categories of quality costs in a Cost-of-Quality (COQ)reporting system.In addition,provide three examples of costs within each of the four categories.

Question

Quizplus · Accepted Answer

Feedback: Prevention: Hiring employees with good references.Training of owners and employees.Good security.Good reservation system.Purchasing quality furniture.
Appraisal: Verifying accuracy of reservation and registration procedures.Inspecting rooms,facilities,building and grounds regularly.Observing activities of employees.Testing furniture and fixtures.Taste testing food.
Internal failure: Re-cleaning rooms and facilities.Restocking rooms with linens,glasses,etc.Out of stock supplies.Re-inspection.Failure to bill on a timely basis.
External failure: Responding to complaints about rooms and food.Responding to complaints about reservations.Emergency cleaning of rooms when not ready on time.Customer refunds because of unsatisfactory conditions.Opportunity cost of lost revenue resulting from unhappy customers.

Cari and Jeremy Just Bought a Bed and Breakfast Inn