Managerial accounting 19.10.20
Quality, costs of quality and pricing
Measuring quality
o Is this a high-quality product?
o And how much does this cost?
o What factors are likely to affect the price?
Dimensions of quality
Product or service attributes:
o Tangible
o Intangible
Customer service before and after the sale:
o Prompt and accurate responses to customer enquiries
o On time delivery
o Customer follow up after sale
ISO 9000 standards: The International Standards Organisation (ISO)
requires that a manufacturer has a well-defined quality control system in
place and that the target level of product quality be maintained
- Sustain quality of product
- Effective quality control system in place
- Provide purchaser confidence in product – when they buy product, quality is ensured
Grade: Capabilities/functions perform as
expected
Conformance: product meets specification of
design
o Measuring quality: To ensure that
a company meets or exceeds its
customers’ expectations
o Measures should:
- Indicate customers’ evaluations of product and service quality
(surveys) rather than the company perceptions
- Measure quality based upon customer perceptions
- Estimate customers’ satisfaction with services received
- Provide warning signals about any deterioration in product or
service quality
, Managerial accounting 19.10.20
- Variability: quality variability indicates inconsistent quality standards
Quality, costs of quality and pricing
Measuring quality
o Is this a high-quality product?
o And how much does this cost?
o What factors are likely to affect the price?
Dimensions of quality
Product or service attributes:
o Tangible
o Intangible
Customer service before and after the sale:
o Prompt and accurate responses to customer enquiries
o On time delivery
o Customer follow up after sale
ISO 9000 standards: The International Standards Organisation (ISO)
requires that a manufacturer has a well-defined quality control system in
place and that the target level of product quality be maintained
- Sustain quality of product
- Effective quality control system in place
- Provide purchaser confidence in product – when they buy product, quality is ensured
Grade: Capabilities/functions perform as
expected
Conformance: product meets specification of
design
o Measuring quality: To ensure that
a company meets or exceeds its
customers’ expectations
o Measures should:
- Indicate customers’ evaluations of product and service quality
(surveys) rather than the company perceptions
- Measure quality based upon customer perceptions
- Estimate customers’ satisfaction with services received
- Provide warning signals about any deterioration in product or
service quality
, Managerial accounting 19.10.20
- Variability: quality variability indicates inconsistent quality standards
