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MGT411 - Money & Banking - Lecture Handout 26

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  • Bank Risk
  • Interest Rate Risk (Cont.)
  • Trading Risk
  • Other Risks
  • Globalization of Banking
  • The Future of Banks
  • Non-depository Institutions
  • Insurance Companies
  • Securities Firms
  • Finance Companies
  • Government Sponsored Enterprises

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MGT510 - Total Quality Management - Lecture Handout 18

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The Cost of Quality:

It’s a term that’s widely used – and widely misunderstood. The “cost of quality” is not the price of creating a quality product or service. It’s the cost of NOT creating a quality product or service. Every time work is redone, the cost of quality increases. Obvious examples include:

  • The reworking of a manufactured item.
  • The retesting of an assembly.
  • The rebuilding of a tool.
  • The correction of a bank statement.
  • The reworking of a service, such as the reprocessing of a loan operation or the replacement of a food order in a restaurant.

In short, any cost that would not have been expended if quality were perfect contributes to the cost of quality.

Total Quality Costs

As the table below shows, quality costs are the total of the cost incurred by: