PMGT5871 Chap.5 Quality Planning and the Cost of Quality
Quality Planning and the Cost of Quality
Quality planning decides how fit for purpose each deliverable must be and how the team will prove it. This chapter separates quality from grade, introduces the standards and the four principles of quality management, and contrasts quality assurance, which prevents defects, with quality control, which finds and fixes them.
It prices quality with the cost of conformance and non-conformance, explains the 1:10:100 rule, and lays out the five columns of a quality plan with measurable acceptance criteria. Quality is taught in the same week as cost because the two are planned together: every prevention or appraisal activity needs budget and schedule time, and every failure the plan does not prevent becomes rework cost.
The Week 4 tutorial ends with groups developing a quality plan for the first case study, and the standards named in the slides, the ISO 9000 family and the guideline for quality management in projects, give that plan a reference point.
What this chapter covers
- 01
Quality compared with grade and gold plating
- 02
Quality considerations and standards
- 03
Four principles of quality management
- 04
Cost of conformance and cost of non-conformance
- 05
The 1:10:100 rule
- 06
Quality assurance compared with quality control
- 07
The five columns of a quality plan
Worked example · free
Pricing the cost of quality
- 1Conformance: $12,000 + $8,000 = $20,000.
- 1Non-conformance: $15,000 + $30,000 = $45,000.
- 1Cost of quality: $20,000 + $45,000 = $65,000.
- 1Comment: most cost is failure, so shift spending towards prevention.
Key terms
- Grade
- A class given to deliverables that do the same job but differ in their technical features.
- Gold plating
- Delivering a higher grade than required, which wastes time and money.
- Quality assurance
- The process of auditing quality requirements and quality control results to keep products and processes acceptable.
- Quality control
- The process of monitoring and recording quality results, checking completed work and fixing defects.
Quality Planning and the Cost of Quality FAQ
What is the difference between quality and grade?
Quality is how far a deliverable's inherent characteristics fulfil its requirements, in other words whether it is fit for purpose. Grade, by contrast, is a class of deliverables with the same use but different technical features. A low-grade product can be high quality.
What does the 1:10:100 rule say?
Every dollar spent preventing defects saves about ten dollars of finding and fixing them inside the project and about one hundred dollars if defective products reach customers or end users, which is why prevention over inspection is a principle of quality management.
What columns does a quality plan contain?
For each product or process the plan records the quality definition, the standards to be met, measurable acceptance criteria, the quality assurance approach that will meet the definition and the quality control approach that will find and fix defects.
Is the cost of a quality inspection conformance or non-conformance?
An inspection is an appraisal activity, so its cost is part of the cost of conformance. Any rework or scrap the inspection reveals is an internal failure cost, which belongs to the cost of non-conformance.
What are the four principles of quality management?
Customer satisfaction, so that requirements reflect customer expectations; prevention over inspection, because preventing defects costs less than fixing them; continuous improvement of the ability to meet quality objectives; and managerial responsibility for making sure those objectives are met.
What is gold plating?
Gold plating means delivering a higher grade than the requirements call for, adding features or specifications nobody asked for. The Week 4 slides treat it as waste of time and money, the opposite risk to a grade so low that the product is not fit for purpose.
Exam move
Make a four-cell grid with low and high grade against low and high quality and fill each cell with an example of your own; this settles the most common confusion. Next, sort a list of twenty quality activities into prevention, appraisal, internal failure and external failure, then into QA and QC. Rework the cost-of-quality calculation with different figures and always add a one-sentence comment on what the split implies.
Finally, write a quality plan row for an intangible feature such as ease of use, insisting on a criterion you could actually measure. Link this chapter to risk as well: a quality requirement that may not be met is a candidate entry for the Week 7 risk register.
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