Quality and Cost
Cost of quality refers to the sum of all costs due to failures, appraisals and prevention (Bexcellence.org, 2012). It is often presented as a percentage of sales in order to help to compare the level activity with quality expenditures. In order to estimate the cost of quality for Hotel Escargo, every process should be carefully considered in identifying the possibilities to reduce the cost of poor quality service.
The first method to approximate and optimize cost expenditures is to evaluate financial performance of the company. Thus, it is possible to consider the cost associated with appraisal, prevention and failures and to compare the sum of it to the target percentage of sales. In particular, the cost of accommodating guests without a reservation, the money spent on redirecting customers to other clients and the time spent on checking the name 3 times are all related to quality cost (Westcott, 2005).
Another method to evaluate the cost of quality is by looking at the activity chain of the Hotel Escargo. The activities related to quality within the chain can be clustered into prevention, appraisal and failure corrections. In the next step, it is possible to estimate the amount of time and money it takes to conducts quality enhancing activities, thus evaluating the cost of quality for the company. Thus, it is currently possible to suggest that the least efficient process in the hotel is the one related to change management due to service failures. The 10 min it takes personnel to finalize the change request is by far greater than the time it takes for check-in/check-out. That is why the hotel might look closer into controlling this cost of quality service and to use a more sophisticated analysis of the data for making further conclusions (Westcott, 2005).
Hotel business is based on continuous work with clients and on the high quality service. Therefore, an evaluation of Hotel Escargo’s cost of quality is essential for providing superior level of service to the customers and for creating awareness of the areas that need further improvement and attention.
References
Bexcellence.org. (2012.). Cost of quality. Retrieved from http://www.bexcellence.org/Cost-
Of-Quality.html
Westcott, R. (2005). The certified manager of quality/organizational excellence handbook.
(3rd ed.). Milwoukee, WI: ASQ Quality Press.
