Cost Parameters Notes: Definitions & Explanations PDF | Download eBooks

Study Cost Parameters lecture notes PDF with total quality management definitions and explanation to study What is Cost Parameters?. Study cost parameters explanation with TQM terms to review total quality management course for online MBA programs.

Cost Parameters Notes:

While developing control charts, different parameters are considered. Cost parameters are one of them. Costs parameters associated with the economic design of the control charts are divided into three parts. These are sampling and testing cost, investigation of out of control point and reduction of detected variation cost, and cost of producing non-conforming products or items. Sampling and testing cost involves salaries of inspectors, cost of testing equipment or tools, cost of destructive testing etc. These costs include both fixed and variable components. The second cost parameter involves all the costs that are associated with identifying, investigating and correcting any out of control situation. The third cost parameter is associated with the failure cost, both internal and external.

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