Cost Of Quality In Service Industry Based On Customer Satisfaction

It's universally known that the costs and the qualities are so significant to any company and it raise the management of cost of quality. The Cost of Quality system helped managers determine the cost of activities in many manufacturing companies but when it was time for the service companies, managers had to come up with new definition and measurements. Since the service industry plays an increasingly important role recent year and it's becoming the new growth point of economy, managers should pay more attention to the cost of quality of service industry.Embedded with various traditional COQ theories and in the current situation of the booming of service industry, the article analyses cost of quality from the new view of customer satisfaction and in the non-manufacturing industry. Take the advantages of the traditional COQ optimization model than build a new model to service industry base on customer satisfaction. Through the measurement of quality costs using the percentage of sales approach, management can be alerted to the potential impact of poor quality on the financial performance of the company and the significance of the COQ Model. Moreover, according to the new quality cost model, management can also determine the types of activities that are more beneficial in reducing quality costs and then gain more profit and competition power.