The Model of Iceberg of Costs
The Model of Iceberg of Costs

Author(s): Mirela Dogaru, Valentina Zaharia
Subject(s): Business Economy / Management, Financial Markets
Published by: Editura Lumen, Asociatia Lumen
Keywords: quality; cost; quality improvement; quality control;
Summary/Abstract: Many of the quality costs are hidden and difficult to identify by the usual assessment systems. The model of the iceberg of costs is very often used to illustrate this issue: only part of the costs of higher and lower quality are the obvious - those drawn in the face above the water level. Identification and improving these costs will significantly reduce the total cost of activities. In the triology, according to the planning phase, once the operations are launched, most of the time, 20% of the activities must be resumed due to the deficiencies of quality. Even in this situation, the process may be out of control (supposedly the activity will be resumed in a proportion of 40%) and must be brought back within the limits of control by taking appropriate measures. After a period of time, by implementing the improvements of quality (the third step of the trilogy), chronic loss may be reduced to a much lower level. Thus, quality control ends to be regarded as a component element of all phases of the production process, from the detection of market requirements, design, design, achievement, and until the product's product to the customer. Improving quality must be continuous and progressive, focus on long - term objectives trying to reach the progress of quality so that the firm will pass on a new level of performance.

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