At PJ Associates, we realize that Cost of Quality may take several forms, each having its own use and advantage/disadvantage.

The four most common techniques that we have found to be of value to our clients are:

1. Historical - determining both conformance and nonconformance cost elements.

2. Fixed vs. Variable Cost Analysis - This is a modification of the Historical method above that focuses on "hidden" costs.

3. Taguchi Loss Function - provides an interesting and viable alternative to the Historical method.

4. Impact of Quality (and Service) on Revenues - This allows the client to closely estimate revenue increases (or decreases) based on potential investment(s) in process and/or quality improvements.