Cost Management 6th Edition by Edward Blocher,David Stout ,Paul Juras,Gary Cokins

Exercise 14

Graphical Depiction: Is There an Optimal Level of Spending on Quality, or Is Quality "Free" Some proponents of TQM assert that quality is free, that is, that quality is a never-ending quest and that improving product/service quality will reduce a firm's total spending on quality. Others believe that after a point there are diminishing returns to additional expenditures on quality. Provide a graphical representation of each of these arguments. ( Hint: Let the vertical axis of your graph represent $ (e.g., revenues or costs), and let the horizontal axis represent the level of quality-the higher the value, on the x-axis, the greater the indicated quality level.) Supplement your graphs with appropriate explanations/interpretations.