External Failure Costs Research Articles

Machine-learning-based sampling inspection under OQC capacity for real-time quality monitoring in the TFT-LCD industry

ABSTRACT In the thin film transistor-liquid crystal display (TFT-LCD) industry, the competition is fierce, and the external failure cost is high. To improve the quality of released products, sampling inspection under outgoing quality control (OQC) is conducted before products are released. Owing to the variety and complexity of inspection items, the task must be carried out manually while realising automation is difficult. Traditional random sampling inspection is limited by sampling quantity, manpower, and material resources. To effectively improve acceptable quality levels, this paper proposes a quality predictive monitoring framework tailored to the production and inspection characteristics of the TFT-LCD industry. This framework includes real-time automatic quality monitoring based on an optimal machine learning prediction model with two-phase feature creation, and it also addresses OQC inspection capacity constraints. Experimental results show the prediction performance based on proposed model is better than the traditional random sampling process. In practice, superior average outgoing quality improves by more than 70% at the same sampling level. In addition, the features of the process can be further controlled and managed based on the prediction model to monitor the key parameters in real time and respond to abnormalities quickly, thereby further improving the quality of released products.

THE RELATIONSHIP BETWEEN THE IMPLEMENTATION OF QUALITY COSTS AND EFFORTS TO IMPROVE PRODUCT QUALITY (A CASE STUDY AT PT INDUSTRI JAMU DAN FARMASI SIDO MUNCUL TBK)

The use of herbal medicine products has seen a decline in trust due to a lack of scientific evidence proving their effectiveness, perceptions of unsafe or unhygienic ingredients, and the negative stigma that views herbal medicine as an outdated form of treatment. However, herbal medicine is believed to have fewer side effects due to the use of natural ingredients passed down through generations. Despite this, many herbal products with chemical ingredients and easily accessible imported herbal products negatively impact the development of traditional herbal medicines, especially in small-scale industries that lack standardization in line with Good Traditional Medicine Manufacturing Practices. Quality costs are the expenses incurred to perform all activities related to the development of product quality. These costs include prevention, appraisal, internal failure, and external failure costs. Quality costs serve as an indicator of product quality success and competitive advantage. PT Industri Jamu dan Farmasi Sido Muncul, the largest herbal medicine producer in Indonesia, strives to improve product quality through consistent supervision and quality enhancement. This study employs a case study method to analyze the relationship between the implementation of quality costs and efforts to improve product quality at PT Sido Muncul. The findings indicate that effective quality cost control contributes to product quality improvement, reduces defective products, lowers costs, and increases profits. Sido Muncul emphasizes the use of science, technology, and research to create high-quality products. Thus, significant investments in product quality improvement provide the company with a competitive advantage, enabling it to maintain and increase its market share. Keywords: Cost Concept, Product Quality, Quality Costs

Cost of Quality Management: Encouraging Business Leaders to Manage and Invest in Quality Enhancement

The quality management is a complex set of constant activities aimed at improving the quality of products and services, regularly evaluating and monitoring it, preventing defects, limiting and reducing malfunctions, and correcting production defects before and after the sale of goods. Ineffective quality management leads to such problems as product returns, claims, replacement or repair, loss of customer base, damage to brand reputation, etc. This paper aims to analyze advanced strategies, methodologies, methods and tools for effective control of quality management costs, ways and means of their strategic integration into the practice of business quality management, emphasize the importance of optimizing the cost of quality management in enterprises. The proposals developed in this article are demonstrated on the example of the woodwork division of MEKKERA (MDM), a subsidiary of the HASNAOUI Group in Algeria. An approach represented in the article combines qualitative and quantitative methods. Qualitative data collection involved semi-structured interviews with four company managers, processed using NVIVO software. The purpose of these interviews was to understand the reasons that led the company to include the evaluation of the Cost of Quality in its quality objectives for 2023, as well as the perspectives and goals aimed for by the company in this initiative. A Quantitative analysis relied on secondary data from the company’s database: direct quality costs were calculated using the P-A-F and Ferrebœuf models, prevention and detection measures’ effectiveness and production process performance were evaluated; key performance indicators for indirect quality acquisition costs were defined. Findings revealed the company exceeded set thresholds for internal and external failure costs, necessitating improvements. Ishikawa method identified causes, and corrective actions were proposed using Failure Mode and Effects Analysis (FMEA).

Green Accounting Analysis in Public and Private Hospitals

This study aims to determine the applicationof environmental prevention costs, environmental detection costs, internal environmental failure costs and external environmental failure costs in public and private hospitals in Batusangkar. The type of research used is a field research using quantitative methods to see how enviromental accounting is applied in public and private hospitals in Batusangkar. The results of this study indicate that the Hanafiah Hospitals has implemented IPAL properly in accordance with the Minister of Environment Regulation No. 11 of 2020 PP of 2021 but not all categories of Enviromental costs according to Hansen Mowen issued by the RSUD. While at the Harapan Ibunda Hospitals also has its own IPAL facility to manage its waste according the Minister of criteria only the city goverment in the relevant sector conducts an evaluation.

Pengaruh Biaya Pencegahan, Biaya Penilaian, Biaya Kegagalan Internal, Dan Biaya Kegagalan Eksternal Terhadap Profitabilitas

This study aims to examine the effect of Prevention Costs, Assessment Costs, Internal Failure Costs and External Failure Costs on Profitability. In this study the population used is the ceramic, porcelain and glass sub-sector companies listed on the Indonesian Stock Exchange from 2017-2021. The sampling technique used purposive sampling. Purposive sampling is a sampling method that is determined through certain criteria by the researcher. Based on predetermined sample criteria, a sample of 6 companies was obtained. This research was conducted with a period of 5 years, so that the total sample of this study was 30 samples. This study uses secondary data using the company's annual financial statements. The data is taken from the Indonesian Stock Exchange. The data analysis technique uses multiple linear regression analysis techniques using SPSS Version 20. The results of the t-test study show that the variable cost of prevention has a significant negative effect on profitability in porcelain ceramic sub-sector manufacturing companies listed on the BEI, the appraisal cost variable has a significant positive effect on profitability on the porcelain ceramic sub-sector manufacturing companies listed on BEI, the variable cost of internal failure has an effect has a significant positive effect on profitability in the porcelain ceramic sub-sector manufacturing companies listed on the Bei, and the external failure cost variable has no significant effect on the profitability of the porcelain ceramic sub-sector manufacturing companies listed on the Bei. The results of the overall variable F test show that prevention costs, appraisal costs, internal failure costs, and external failure costs have a significant effect on profitability in porcelain ceramic sub-sector manufacturing companies listed on the BEI.

PENERAPAN AKUNTANSI LINGKUNGAN DARI SUDUT INDUSTRI PERHOTELAN

This study aims to determine, identify and analyze efforts to implement green accounting or environmental accounting by Hotel X. The analysis used in this study differs from that used in previous studies in that it divides all forms of environmental accounting efforts into environmental accounting indicators which The 3-star hotel that serves as the research object also differs from earlier studies. The method used in this research is descriptive qualitative with a case study. Data was collected through interviews and observation. The research object is Hotel X, a 3-star hotel located in Gili Trawangan, Lombok, Indonesia. The result shows that of the four environmental accounting indicators, Hotel X is the most dominant in terms of internal failure costs. This is because the company has not maximized environmental prevention costs and environmental detection costs. External failure costs that are currently being incurred by Hotel X, are only related to cleaning and turtle conservation costs

Environmental Cost Accounting Practices in Waste Management

Purpose: This study aims to determine and analyze how TPST 3R Mulyoagung Bersatu discloses waste management and applies environmental cost accounting in the identification, recognition, measurement, presentation and disclosure of environmental costs in the financial statements, and classifies environmental costs into environmental prevention costs, environmental detection costs, internal environmental failure costs and external environmental failure costs. Methodology/approach: This research was conducted at the Integrated Waste Management Site (TPST) 3R Mulyoagung Bersatu, Dau District, Malang Regency. This research is a qualitative research. In this study using primary and secondary data. Primary data was obtained through interviews, documentation and observation in the field. While secondary data is obtained from data or documents of TPST 3R Mulyoagung Bersatu. Findings: The results of this study are that TPST 3R Mulyoagung Bersatu recognizes costs using the cash basic method and environmental costs are recognized as a component of production costs, namely general operational costs and fuel, employee costs and maintenance costs. Environmental costs at TPST 3R Mulyoagung Bersatu are environmental prevention costs; salary costs and costs of cleaning equipment and cleaning materials, environmental detection costs; none, environmental internal failure costs; vehicle and machinery maintenance costs, building and infrastructure maintenance costs, social costs, external failure costs; none. Practical implications: the results of this study have implications for the development of environmental cost accounting practices in waste management. Originality/value: the research results show that the environmental costs accounting is very relevant and important to waste management because it can evaluate and reduce the environmental impact of the waste management process

Pengaruh Biaya Kualitas Terhadap Produk Rusak (Studi Kasus Pada Toko Kue Sari Rasa Lombok)

The increasing competition between the trading industries and the current global economic development, companies are required to be able to compete with other companies. One way is to satisfy and meet consumer needs and improve the quality of production. Sari Rasa Lombok has tried to improve the quality of its products, but in reality there are still damaged products. This study aims to determine the effect of quality costs on damaged products at the Sari Rasa Lombok cake shop. The data used is the cost of quality and the number of damaged products from 2019-2021. The independent variables in this study are prevention costs, appraisal costs, internal failure costs, and external failure costs. The dependent variable in this study is the damaged product. The analytical model used is descriptive analysis and multiple linear regression with hypothesis testing partial test (t) and simultaneous test (f). The results of this study indicate that the costs of prevention, assessment costs, and internal failure costs partially have a positive effect on damaged products, while external failure costs do not partially affect damaged products. Furthermore, simultaneously prevention costs, appraisal costs, internal failure costs, and external failure costs affect the damaged product by 85% while the remaining 15% is influenced by other factors.

The Effect of Prevention Aspects, Assessment Aspects, Internal Failure Aspects, and External Failure Aspects on the Benefits of Construction Company Projects

Several construction projects of PT. Wijaya Karya (Persero) Tbk. experienced many records of product deviations that required repairs to be accepted by the employer. Quality costs (prevention costs, costs, internal failure costs, and external failures) planned by project management are still low on average 1% - 2%. The decline in profit in the last 3 years, namely from 2019 to 2021, is very likely due to the cost of repairs due to poor quality. This study aims to determine the effect of prevention, appraisal, internal failure, and external failure costs on the profitability of construction company projects. The population of this research is construction company employees who have managerial positions, with a total sample of 50 people. The analytical method used in this research is multiple linear regression analysis using the SPSS computer program. The results of the study found that prevention costs, appraisal costs, internal failure costs, and external failure costs had an effect both individually and simultaneously on the profitability of construction company projects.

Environmental Cost Accounting: Behind the Major Project for the Construction of a Covid-19 Hazardous Waste Management Facility

After focusing on handling Covid-19, all countries face Covid-19 medical waste. Covid-19 medical waste in Indonesia reached 18,460 tons as of 27 July 2021. The number of waste management facilities did not follow the increased volume of hazardous medical waste. The government has compiled the construction of hazardous medical waste management facilities from health facilities into the Government Work Plan (RKP) for 2022. The budget allocated for the construction facility is quite large. An analysis is needed from the budget management perspective to achieve the right goals and objectives of the program. This research used literature studies from various relevant sources. Data analysis uses an environmental cost accounting perspective consisting of prevention, detection, and internal and external failure costs. The results show that from all aspects of these costs, the government has fulfilled them through the main program and supporting programs. Each program has a budget but no details of every need. The government has not budgeted for technology development, human resource development, collaboration with the private sector, and other impacts that have the potential to hinder the management of hazardous medical waste from health facilities.

How to outsource production considering quality management: Turnkey or buy-sell?

As a common practice in many industries, outsourcing has two main structures, namely turnkey (contract manufacturers (CMs) purchase components from suppliers directly) and buy-sell (original equipment manufacturers (OEMs) purchase components from suppliers and resell them to CMs). However, outsourcing may result in product quality problems. How to choose an appropriate outsourcing structure considering quality management is an important problem faced by OEMs. In this paper we consider a system comprising one OEM and one CM, and study their equilibrium policies under the turnkey and buy-sell. Then we compare the OEM's profits under the two structures and identify conditions under which one structure outperforms the other one. For the case where the compensation is an exogenous parameter, we show that which structure is optimal depends on the compensation, the external failure cost, the cost differences between the two suppliers and the CM's crafts, and the non-defective rates of the low-type supplier and low-level process craft. When the compensation is higher than the external failure cost, the OEM should choose turnkey. Otherwise, which structure is better depends on the parameters. We then consider the case where the compensation is a decision variable and find that the OEM should choose turnkey. Finally, considering the case where the players have different market powers, we find that turnkey is optimal when the CM is more powerful. When the OEM is more powerful, turnkey is better when the external failure cost is low and the OEM's market power is not too high; otherwise, buy-sell is better.

Total Quality Management Dan Biaya Mutu: Meningkatkan Daya Saing Melalui Kualitas Produk

Increasingly competitive business competition demands innovation in the quality of products produced by companies with the aim to fulfill customer satisfaction, one of which is through Total Quality Management (TQM) techniques. The achievement of optimum company performance can be achieved by implementing Total Quality Management (TQM) properly and being able to reduce quality costs in creating quality products. This study aims to identify the relationship between Total Quality Management (TQM) and the cost of quality on product quality using a literature review. The research uses qualitative methods related to the research problem. The results showed that by implementing Total Quality Management (TQM) on an ongoing basis by involving all components of management has a direct relationship to product quality. Product quality is influenced by quality costs which consist of prevention, assessment, internal, and external failure costs. The fewer defective products produced, the higher the allocation of quality costs used by the company to produce quality products, this leads to an increase in orders or customer demand which means it will increase sales and company profits.

Chefs’ perspectives of failures in foodservice kitchens, part 2: A phenomenological exploration of the consequences and handling of food production failure

ABSTRACT This paper explores the consequences of food production failure (FPF) and its handling in foodservice operations from the perspective of chefs. A phenomenological epistemology and qualitative methodology were followed. Fifteen semi-structured interviews with chefs working in independent restaurants and hotels were carried out using purposive sampling, and employing an emic posture. Interviews were transcribed verbatim, read repetitively, and coded. Thematic analysis yielded themes on the consequences of FPF, on operation and staff, handling failures with kitchen staff, front of the house (FOH), and management. The findings revealed that the major ramification of FPF is financial through food loss. Representing both internal and external failure costs, FPF costs were classified into four tangible types: bin cost, rework cost, lost sales cost, and recovery cost. However, the serious intangible cost of staff demoralization was also identified. Handling failure is a complex task involving different parties and the management of various emotions (anger, frustration, etc.). Furthermore, the phenomena of failure ownership, secrecy, and historic marginalization of chefs, coupled with doubts over management competency, can all obstruct learning from mistakes, the much-cherished by-product of FPF, thereby negating the notion of the “learning organization.” Moreover, error management training (EMT) seems to be a potential approach to combat FPF.

Applications of Artificial Intelligence in Quality Assurance and Assurance of Productivity

Probabilistic intelligence is vital in current management and technology. It is simpler to persuade readers when a management or engineer reports connected difficulties with objective statistical data. Statistical data support the evaluation of the true status, and cause and effect can be induced. The rationale is proven using deductive logic and statistical data verification and induction. Quality practitioners should develop statistical thinking skills and fully grasp the three quality principles: “essence of substance,” “process of business,” and “psychology.” Traditional quality data include variables, attributes, faults, internal and external failure costs, etc., obtained by data collection, data processing, statistical analysis, root cause analysis, etc. Quality practitioners used to rely on these so-called professional qualities to get a job. If quality practitioners do not keep up with the steps of times, quality data collection, organization, analysis, and monitoring will be confusing or challenging. Increasingly, precision tool machines are embedded in various IoTs, gathering machine operation data, component diagnostic and life estimation, consumables monitoring and utilization monitoring, and various data analyses. Data mining and forecasting have steadily been combined into Data Science, which is the future of quality field worth worrying about.

Measurement and Analysis of Environmental Costs in the General Company for Electricity Production, Central Region: An Applied Research in the First Station south of Baghdad

The research aims to identify the environmental costs of the economic unit in sample research, as well as classifying the environmental cost to prevention costs, appraisal cost, internal failure cost and external failure cost. moreover the research aims to measure and analyses the apparent and hidden environmental cost. related to the activities undertaken and clarifying the impact of these costs on the institute as a whole. The research problem a raised As a result of the high costs incurred by the economic unit in sample research, represented by the electric power plant in order to preserve the environment, it was found that the company suffers from a weakness in the measurement and analysis of environmental costs according to the classifications of its activities, which in turn is reflected in the costs incurred by the company, causing its increase as a result of lack of Classification it at the expense of its activities, in order to remove the environmental damage resulting from the practice of the activity of the unit, which negatively affects the quality of the environmental service of the company. The research was based on the hypothesis that Accurate and clear measurement and analysis of environmental costs will contribute to determining environmental costs based on the classification of their activities, and thus knowledge of the resulting environmental damage and the possibility of avoiding or limiting them, Where the research reached many conclusions, the most important of which is the station's failure to measure, analyze, and determine the environmental costs to prevent pollutants coming out of the electric power production process.

Mitigating Product Quality Risk under External Financial Pressure: Inspection, Insurance, and Cash/Collateralized Loan

We consider a single‐period manufacturing problem wherein a risk‐neutral manufacturer procures product components from an upstream supplier. Component quality is uncertain. Dysfunctional components result in defective products associated with an external failure cost. There is external financing pressure related to financial stress. The manufacturer can use the internal cash‐flow and a collateralized loan to manage product quality risk through incoming inspection, business insurance, and cash hoard. We find that there is no cash hoard if a collateralized loan is used, and the cash hoard's value increases as external financing pressure decreases. Interestingly, more initial internal cash‐flow does not always lead to more investments in inspection and insurance. We also find that business insurance may improve a manufacturer's inspection effort. Finally, we reveal that, as the initial internal cash‐flow increases, inspection and insurance first substitute and then complement each other.

Environmental Accounting Costs and Financial Performance of Selected Quoted Oil and Gas Companies in Nigeria

The focus of this study is to examine the effects of environmental accounting costs on the financial performance of selected quoted oil and gas firms in Nigeria. To achieve this objective, Secondary source of data was used in the study and sourced through Nigeria exchange group and companies’ annual report of Conoil, MRS Oil and Forte Oil covering the period of 21years (2000-2020). The study adopted both the descriptive and inferential statistics in analyzing the panel data and in order to empirically investigate the effect of the explanatory variables on the dependent variable, multiple regression model involving ordinary least square method was used to test hypotheses formulated. Results from the regression indicate that environmental internal failure cost and environmental external failure cost have a positive and significant effect on the financial performance of oil and gas companies in Nigeria, while, Environmental pollution prevention costs and environmental detection costs revealed an insignificant effect on the financial performance of oil and gas companies in Nigeria. The Implications of these results are that, if the variables are not identified and improved upon, the challenges facing environmental accounting costs on the financial performance of the companies may persist and may lead to sub optimal performance and failed vision. Thus, the study concluded that the environmental accounting costs have significantly affected the general financial performance of oil and gas industry in Nigeria. The study therefore recommends that the management of petroleum companies should continue to put funds on internal failure cost to ensure continuous reduction of contaminants in the environment to an amount that complies with environmental standards.

Coordinating a two-stage supply chain with external failure cost-sharing and risk-averse agents

Production processes are not defect-free in reality, and such imperfect processes generate external failure costs. In this paper, we study a two-stage supply chain under a manufacturer-led Stackelberg setting, a supplier-led Stackelberg setting, and a centralized setting. A risk-averse supplier shares external failure costs with a risk-averse manufacturer, who will be encouraged to conduct quality improvement investments. Analytic results are derived. In order to investigate how the external failure cost-sharing ratio, channel power leadership, and quality improvement investments affects the optimal solution, a comparative analysis is performed. We also propose a new contract that considers external failure cost-sharing between the two supply chain members to coordinate a decentralized system. A numerical example is given to illustrate the proposed theorems and influences of some critical parameters on the equilibrium results under different supply chain structures. Although traditional wisdom suggests that channel power will benefit the supply chain leader, we show an opposite result under the premise that the external failure cost-ratio shared by the dominant player is high enough. Specifically, we also theoretically demonstrate that quality improvement investments can always bring higher profits to parties under any supply chain system and numerically prove that the more risk-averse partners gain less profit in the two-echelon supply chain under the Mean–Variance framework.

Assessing Cost of Quality in a Medical Device Division of a Training Hospital: A Case Study in Iran

Background: Cost of Quality is an approach that helps organizations evaluate the extent to which their resources are used to prevent poor quality activities, assess the quality of provided services, or evaluate the number of resources that are wasted due to the internal and external failures occurring in a system. The research objective was to measure the Cost of Quality(CoQ) in a medical device division of a hospital in Qazvin, Iran. Methods: We performed a qualitative study in the medical device division in a public hospital affiliated with Qazvin University of Medical Sciences, Iran in 2020. To measure and report the (CoQ) in the division, the Prevention-Appraisal-Failure (PAF) model was used. Data were collected through document review, semi-structured interview, and group discussion, which were entered into the Excel software to calculate their distribution and frequencies using the descriptive statistics method. Results: Among different cost categories, the highest amount of expenditures belonged to internal and external failure costs. Results also revealed that several factors were responsible for the failures, including lack of knowledge of personnel about the proper use of medical devices; failure to periodically perform calibration on due dates; lack of adequate supervision; stress and work pressure among employees; and lack of managerial commitment toward the importance of preventive maintenance. Conclusion: In order to decrease the number of failures occurring in a working system, it is required to increase personnel's knowledge about the proper use of medical devices, perform calibration of devices on due dates, increase managerial commitment toward preventive and quality appraisal activities and apply systematic supervision.

Industrial Quality Prediction System through Data Mining Algorithm

Based on an assessment of production capabilities, manufacturing sectors' core competency is increased. The importance of product quality in this aspect cannot be overstated. Several academics have introduced Deming's 14 principles, Shewhart cycle, total quality management, and other approaches to decrease the external failure costs and enhance product yield rates. Analysis of industrial data and process monitoring is becoming increasingly important as a part of the Industry 4.0 paradigm. In order to reduce the internal failure cost and inspection overhead, quality control (QC) schemes are utilized by industries. The final product quality has an interactive and cumulative effect of various parameters like operators and equipment in multistage manufacturing processes (MMP). In other cases, the final product is inspected in a single workstation with QC. It's challenging to do a cause analysis in MMP whenever a failure occurs. Several industries are looking for the optimal quality prediction model in order to achieve flawless production. The majority of current approaches solely handles single-stage manufacturing and is inadequate in dealing with MMP quality concerns. To overcome this issue, this paper proposes an industrial quality prediction system with a combination of multiple Program Component Analysis (PCA) and Decision Stump (DS) algorithm for MMP quality prediction. A SECOM (SEmiCOnductor Manufacturing) dataset is used for verification and validation of the proposed model. Based on the findings, it is clear that this model is capable of performing accurate classification and prediction in the field of industrial quality.