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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:

MGT520 - International Business - Lecture Handout 45

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Learning Objectives:

  • Export & Import
  • Strategies for import and export
  • Status of Pakistan in Exports and Imports
  • FDI and Pakistan
  • International Business and Pakistan

Export Assistance, Pakistan:

  1. Export Promotion Bureau
  2. State bank of Pakistan as export refinance.
  3. Chambers of Commerce and industries as facilitators.
  4. Government as announcing special incentive to exporters like rebates etc.

Export Assistance, International:

  1. Exporters in the US can draw upon two types of government-backed assistance to help finance their exports; the Export-Import bank and export credit insurance provided by the FCIA.
  2. The Export-Import Bank is an independent agency of the US government whose mission is to provide aid in financing and facilitate exports and imports and the exchange of commodities between the US and other countries.
  3. In the US, the Foreign Credit Insurance Association (FCIA) provides export credit insurance. The FCIA provides insurance policies protecting US exporters against the risk of nonpayment by foreign debtors as a result of commercial and political risks.

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