Modelling the cost of poor quality in a five-state part manufacturing operation: a case study

The quality history of individual parts from a critical operation can be modeled by a five-state Markov chain involving factory rework operation, customer inspection and field test, parts scrapped, parts defective but used-as-is by concession or re-graded for alternative applications, and defect-free parts satisfying customer requirements. We estimate total failure cost by a five-state Markov chain model and present a case study to demonstrate relationship of the total failure cost to appraisal and prevention costs.