The study was carried out in a furniture factory, which specialises in
manufacturing of bedroom, and dining set furniture for export market. The
purpose of this study was to identify the quality cost and to provide guidance to
general management and quality program management to enable them to
structure and manage programs to assist in the overall product cost reduction.
The cost of quality was divided into four groups, which were prevention cost,
appraisal cost, internal failure cost and external failure cost. The prevention cost
was 30.2%, appraisal cost was 17.6%, internal failure cost was 43% and external
failure cost was 9%. The major contributor internal failure cost was from down
grading cost, valued at RM 30,000, The main contribution from prevention cost
was quality planning around Rm 30,000. Receiving inspection gave a higher
value in appraisal cost , which was RM 13,800 and the external cost just
contributed only RM 10,000. Warranty claim was the most highest cost, it came
from the department of Replacement Part or RP. From the result it showed that
typical ratio for TOC as a percentage of sales was 15%, value added was 37%
and direct labor cost was 2.7%. The value of direct labour cost was below 5%
(international standard). This showed that this company has an efficient quality
program and well trained staff to fulfill the quality requirements
