The Relationship Between Quality Assurance And Quality Control Accounting Essay


In nowadays, quality assurance has become a synonymous with quality control or statistical quality control especial in manufacturing fields. Although there are subtle differences between these concepts, they are similar and each relies on the use of statistics.

Quality assurance is also necessary to guarantee consistent quality of products and service. Lack of quality is only detected if every activity leading to a product or service is assessed and documented in such a way that misunderstanding and failures are excluded.

Finally, it is can be achieved with quality assurance system that is also acceptable by the manufacturing fields and their customers.

Question 1:

Select an existing organization of your choice; identify key factors necessary for the implementation of a QA system within a process in the organization. For the organization process which you chose, explain in detail the implementation and running of a QA system towards it

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The choices of organization are listed below:

Large Bank

Health-care facility

University nonacademic department

Large department store

Manufacturing facility

Large Grocery Store


Introduction of manufacturing facility

Different groups of people are interested in the quality assurance of product for different reasons. An effective quality assurance system can only take place if interests of each group are factored into system. To most people involved with manufacturing, the words "quality assurance" conjures up thoughts of production line sampling, laboratory testing, and an evaluation to determine that the product meets some prior established level of performance. While this is important in the control of production quality, it is only a portion of successful quality assurance system. Quality assurance is not just a good manufacturing process or trained and capable laboratory operation.

A quality assurance system for plastic material must interrelate with other material usage, precuts, standards, and regulations so that a comprehensive and meaningful system can be developed. The quality assurance process begins with establishing a balance among producer, customer, and other third party interests, followed by the development of suitable test methodology of know precision and bias. Establishing a mutually agreeable performance level; and finally, promoting a quality control program to ensure the manufacturer of consistent product.

The quality assurance of Polymeric Materials and Products is touch upon each of these factors. For the ease of presentation of this publication, it does can have been three categories:

Developing a working system for quality assurance describes the aspects of a suitable quality assurance system from industrial, safety, and testing.

Methods used for the quality assurance of plastic described some of the current state of the art test methods and equipment that are applicable for monitoring production control.

Practical application of quality assurance techniques for plastic pipes- there are need for a quality assurance system and the problems encountered when attempting to establish a suitable precision and bias statement for plastic pipe methods.

Apply Quality Assurance in the maufacturing facility

Quality assurance of Polymeric Materials and Products, help to generate responses that reflect the realities of the times. We can no longer be content with traditional viewpoints. A shrinking world economy, tough competition from abroad, and maturation of industrial markets all dictate the need to reevaluate and reexamine our attitudes towards the issue of product quality.

Thus, we will provide an example of how one segment that is the Elastomers Division (a part of the Polymer Product Departmenmt) to organize its quality assurance system. We will present the particular challenges of the elastomer industry, we feel that the concepts to be discussed can be apllied to similar system in a variety of industrial. We also hope to stimulate further interchanges into new ways of accomplishing an ever more significant task, tha is establishing and maintaing the high quality of polymeric materials and end-use products.

Quality is everyone's job

It shall be the policy of the polymeric material and products to maintain a position of quality leadership for products, service, and systems.

This policy statement reaffirms on a corporate level what is becoming more and more apparent on a worldwide scale that quality of prouct, quality of process, and quality of service must be an integral part of any successful business. Quality will in the future separte the winners from the losers; it will exert an ever increasing impact on market share and on bottom-line profitability.

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At polymeric material and products "quality" is a line management responsibility and is being accorded the same importance as "safety". With one difference: the goal of safety is zero injury; the goal of quality is zero defect.

Even before establishing the sales specification, a set of manufacturing limits is negotiated by consensus among the manufacturing, sales and R&D divisions. These limits then become the set of constraints against which quality control tests and classifies a product as acceptable or unacceptable for sale to the consumer.

In addition to the negotiation of sale specifications and manufacturing limits, the quality assurance group performs the following functions.

Handles customer complaints

Reviews new analytical test methods

Analyzes quality trends and initiates quality improvemment programs

Negoatiates customer purchase specifications

Initiates and approves special quality limits for specific customers

Complaint Handling

Complaint handling, the resolution of a disagreement between the supplier and customer, requires the objectivity of a third party observer, that is one who can respond to the customer's expressed dissatisfaction, be sufficiently critical of the customer's operation to separte product deficiency from improper storage or improper product usage, and at the same time reflect the realities of the manufacturing process. The quality assurance group, acting indepently of the manufacturing organization, srves the need of the customer, field sales and of manufacturing in this critical function.

Figure 1.0: Preferred communication routed- customer and polymeric material and products.

Customer purchase Specifications

These specifications are explicit agreements with the customer; they are normally based entirely on the product quality limits provided in the sales specifications. In the commitment of the corporation to respond to its customers' business needs. Many companies are under pressure from their customers, to obtain and maintain detailed specification on all incoming material for their finished articles. Purchase specifications then become necessary adjuncts to the product sold.

The quality assurance group thus serves as a focal point and nucleus for all the quality-related activities of the corporation. Let us examine some of the interfaces as shown in figure 1.0 and explores ways in which the several tasks assigned to the quality assurance function can be further improved.

Quality Assurance improved

1) Quality assurance and the customer

The usual interaction between the customer and the quality assurance function is one of complaint. For example, the material doesn't meet the specification, it meets the specification but doesn't perform in the usual manner, it's contarninated, it smells bad. A flow diagram of typical complaint is shown in figure 2.0. To answer the complaint the QA group generally invokes the help and investigate support of many segments of the of the organization: R&D, manufacturing, and technical service, especially in those cases in which the material is shown to meet all sales specifications but still does not fully satisfy the purchaser in performance. Because this interaction often requires our full attention we sometimes overlook the potential for establishing a close working relationship with the customer on general quality issues. Representatives of quality assurance should schedule periodic visits tokey customers to present a continuing update of programs and prevent quality problems before they occur. Establishing a dialogue between the quality assurance group and the customer works in favor of both parties achieving their individual goals of high quality service and product.

Customer - Customer has a problem and informs salesperson.

Salesperson - Saleperson submits complaint forms with all information, plus ample samples.

Complaint Coordinator Quality Assurance - Complaint coordinator assigns complaint and distributes to persons concernes.

Complaint Investigator - Investigator of product involved performs work or submit to manufacturing source of material for evaluation.

Material Source - Plant R&D to examine records and evaluation.

Investigator - Investigator to complile and submit report back to the salesperson and persons concerned.

Salesperson - Salesperson in turn informs customer of findings. Hopefully this can be accomplished in 8 working days.

Figure 2.0 - Steps to a complaint investigation.

2) Quality Assurance and Marketing

In today's marketplace, the competitive advantage will often be given to the organization that includes quality as a key factor in the value-in-use of their product. To implement this concept, this business plan, usually established by marketing management at the beginning of each sales year, should incorporate input from the quality assurance function. It then becomes the task of a responsibilities QA group to gain an appreciation and understanding of the dynamics of the market for each product to help the marketing group judging the impact of improved quality on market share and return-on-investment and to help establish a balance between the costs versus the benefits of any quality program. It has been well established that a successful quality program requires commitment from top management, the close association of QA and marketing can help demonstrate to upper management the strong interdependence of quality and profitability.

3) Quality Assurance and Manufacturing

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Implementation of quality improvement programs, quality circles, improvements in inspection procedures, and streamlining of test methods is the responsibility of the manufacturing division, usually the plant quality control group. The interaction between QA and QC groups is one of mutual support and reinforcement. Strengthening of the entire program will result from establishing uniform

Figure 3.0: Proposed complaint procedure - Quick Response Telax.

Test methods replacing wherever possible, "in-house" procedures with approved ASRM methods and standardizing sampling procedures, test temperatures, and statistical reporting techniques, again, according to the guidelines established by ASTM. The reason for this is obvious but bears repeating, this is a common universally accepted procedure used by both the supplier and the customer is essential if differences in quality are to be reconciled. Implementation of product quality management techniques and intiation of interlaboratory cross-check programs are some of the benefits of this type of interaction.

4) Quality Assurance and R&D

The principal role of QA in new product development is the translation of physical properties and processing characteristics of the new material to the appropriate manufacturing limits and sales specifications. This is largely a negotiating role with emphasis on setting specification limits that are at once realistic and competitive and on developing and approving test methods. This is the primary point of interaction with T&D. Together the two groups serve the needs of the consumer by constantly searching for better means of predicting and controlling polymer or polymer product properties and polymer processing characteristics. Active participation of both the QA and QC function in local and national symposia on processing and on instrumental techniques as well as thorough involvement in ASTM committee activities is needed to strengthen these interactions and improve group effectiveness. In addition, the quality assurance groups provide critical input on new product design and customer needs for product uniformity.

Figure 4.0: Proposed complaint procedure - Quality Technical Service Request.

5) Quality Assurance and Technical Service

The QA group and the technical service group both respond to customer requests and strive to achieve customer satisfaction. More than other branches of the polymer industry, it is sometimes difficult to determine the basis of customer dissatisfaction. The problem may be caused by a fundamental deficiency in the elastomer or may be caused by the customer's storage and handling procedures before part formation, or a variety of other reasons. Since virtually all elastomers are used in compounds, that is mixed with solid filler, extender oils, curatives, accelerators, anti-oxidants, antiozonants, and so forth, and then cured, it is an extremely delicate task to decide whether a customer problem should be directed to the QA group who would deal with polymer deficiencies or to a technical service representative who would attempt to resolve the problem based on his compounding and processing expertise.

In our quality assurance program we have attempted to provide a mechanism that allows both routes to be followed more or less simultaneously. One technique is the Quick Response Telex, which places responsibility on the QA group to response within 24 hours with lot analysis or other pertinent data on the raw polymer lot in question. This rapid response system is giving the customer tangible evidence of a company's commitment to quality assurance.

An additional facet of this response system is the merging of the QA and technical service functions via what we have chosen to call a Quality Technical Service Request (QTSR) as shown in figure 4.0. The QTSR allows the responding body, in this case the QA group, to act on a customer's problem using all the compounding and processing skills available in the organization. It also serves as a means of addressing the "chronic but not critical" problems that could lead to more drastic complaints of left investigated supporting enclosure to electrical insulation. Each usage requires compliance with minimum material property criteria in order that acceptable product performance can be obtained. Maintaining compliance with plastic-material property requirements plays an important role in assuring the acceptable performance of products that the UL evaluate.

6) Product Function

Having obtained information to identify of the material, the second step is to identify the function of each part each application. From a safety performance viewpoint, a determination of functions that is critical or noncritical to the application must be made. Polymeric materials are used in many applications, and they serve a wide variety of functions. For example, plastics are used as the physical enclosure or housing for electrically components, enclosures will be used as examples of a product throughout this paper.


As my conclusion, quality assurance system is a very important in Polymeric Material and Products. They'll always focus the quality assurance in their products. It is can make sure the products is can be get the ISO.

Finally, the quality assurance system must always take act in every companies because it is can prevent the product is not have any unwanted risk or damages.


In nowadays, a lot of companies are focuses on their assigning costs to products to separate costs incurred during a period between costs of goods sold and the closing inventory valuation. The extent to which product cost accumulated for inventory valuation and profit measurement should be adjusted for meeting decision-making, cost control and performance measurement requirements is also briefly considered.

Thus, the health-care facility is also having many factors that affect the costing. It is will make the hospital to be weaker such as medical equipment is not prefect and some of their employees are not very professional. It is will make a hospital to be low class.

Question 2:

Select an existing organization of your choice, describe, and evaluate factors that affect the costing within that organization with relevant examples.

The choices of organization are listed below:

Large Bank

Health-care facility

University nonacademic department

Large department store

Manufacturing facility

Large Grocery Store


Costing accounting may be defined as the establishment of budgets, standard costs and actual costs of operations, processes, activities or products, and the analysis of variances, profitability, or the social use of funds.

Ever since the use of money replaced barter, people have been concerned with costs. However, it was the concentration of manufacturing facilities into factories which gave impetus to the development of recognisable costing systems. Nowadays, costing is used very widely indeed in hospitals, transport undertakings, local authorities, offices, banks as well as in every organizational.

The cost accounting system of any organization is the foundation of the internal financial information system. Management needs a variety of information to plan, to control and make decisions. Information regarding the financial aspects of performance is provided by the costing system. The information provided by a typical costing system.

An important part of the managerial task is to ensure that operations, departments, processes and costs are under control and that the organization and its constituent parts are working efficiently towards agreed objectives, for example, Production control, Quality Control, and Inventory Control, the Cost Accounting system is the key financial control system and monitors the results of all activities and all other control systems.

Cost Units

Costs are always related to some object or function or service. For example, the cost of a car, a haircut, a ton of coal etc. The cost unit to be used in any given situation is that which is most relavant to the purpose of the cost ascertainment exercise. This means that in any one organization numerous cost units may be used for particular part of the organization.

Costs may be classified in numerous ways, but a fundamental and important method of classification is into direct and indirect costs. Direct costs are those costs which can be directly identified with a job, batch, product or service. Typical examples are

Direct materials - The raw materials used in a product, bought in parts and assemblies incorporated into the finished product.

Direct wages or Direct labour cost - The remuneration paid to production worker for work directly related to production, the salaries directly attributable to a saleable service.

Direct expenses - Expenses incurred specifically for a particular product, job, batch or service; royalties paid per unit for a copyright design, plant or tool hire charges for a particular job or batch.

Direct material + direct labour + direct expenses = prime cost

Health-care facility

In the cost efficiency in hospital, there are for profit hospitals operated more efficiently than nonprofit hospitals, and that increased competition from area hospitals, along with greater HMO penetration, contributed to improvements in cost efficiency. Higher occupancy rates, greater intensity of care provided, and a higher occupancy rates, greater intensity of care provided, and a higher outpatient to total patient ratio, helped enhance cost efficiency. Different estimates of cost efficiency when sorting hospitals compared to when pooling hospitals.

Hospitals in highly centralized networks, with unified owership, had more revenues on assets, larger profit margins, and lower expenses than hospitals in contractually based netweorls. While hospitals in alliances earned higher total revenues than hospitals not in alliances, hospitals in alliances did not operate at lower costs than hospitals not in alliances. Thus, there are owned chained hospitals earned more profits, had larger patient revenues peradjusted admissions than non-profits chain hospitals. It is a little statistical difference in the total cost per adjusted admission between the government and non-profit hospitals that were long-term members of multi-hospital systems. The averager cost of non-system, non-profit hsopitals. The organization membership/hospital performance relationship.

Factors that influence cost efficiency

Hospital must have a set up the framework for estimating cost efficiency, and factors that affect cost efficiency, we begin with the given quantities of inputs each hospital uses. Suppose that one hospital produces its output quantities at lower cost than any other hospital. This one hospital would be the most cost efficient hospital. For the remaining hospitals, one could measure what total cost firms would incur if they produced their output levels as efficient as the most cost efficient firm. So, we are focus on the reduction of observerable total cost that a firm could produce its current output levels at the firm operated as efficient as the most cost efficient firm. A cost efficiency score of less than one indicates that the firm uses more than the cost minimizing input quantities to produce its observed output levels.

One variable that could alter how efficient hospitals produce their outputs is hospital market share. A reduction in hospital market share and profits, possibly due to increased competition from area hospitals, makes it more difficult to provide the same quantity and quality of health care services. Changes in the market share by enacting policies that help enhance cost efficiency could give non-profit hospital the necessary finance to provide the same quantity/quality of health care services.

A hospital's market share of beds equal the number of beds regularly set up and staffed for inpatient use in period divided by the corresponding number of beds for all country general medical and surgical hospitals. Thus, reduction in hospital facing more competition from area hospitals, it may contribute to improvements in hospital cost such as implement policies that help enhance cost efficiency to maintain a specified level of profits.

The number of contracts hospitals signed with HMOs and the number of contracts hospitals signed with PPOs may also change how efficient hospital produce their output. Hospital may offer HMO and PPO contracts, with discounts on fees, to provide health care services to firm employees enrolled in HMO and PPO. Hospital could benefit from treating more patients, and earning higher profits, after signing the contracts. Managed care organizations could obtain discount on fees from hospitals with low occupancy rates. Since a larger portion of hospital revenues and profits may come from patients covered by the contracts. If hospitals use mark-ups over cost to price their service, then offering discount yields smallermark-ups. Enacting policies that contribute to improvements in cost efficiency, and lower treatment cost, can help hospitals maintain a specified level of profits. If increase in hmoc and ppoc may help enhance hospital cost efficiency.

Finally, hospitals in a system may also join an alliance . Affiliation in multiple organizations may or may not contribute to improvements in cost efficiency, compared to membership in only a sytem. It is helps to enhance hospital cost efficiency.

Empirical Model And Estimation Technique

A stochastic cost frontier is estimated that allows for time-varying efficiency. Production cost of a hospital may also be affected by factors outside of the hospital manager's control. One such factor is a hospital's teaching status. Teaching hospitals may have higher production cost than non-teaching hospitals, beacues teaching hospital may employ a wider variety of highly skilled physicians and equipment in order to treat patients and educate students. A variable tea is added to the cost function to allow for potential cost differences between teaching and non-teaching hospitals.

Hospital costs are also influened by the case-mix severity of the patients treated. If hospitals in a multi-hospital system allocate patients among system members, then system members would most likely treat a narrower range of cases could likely be reflected as a smaller variation in the hospital.


In my conclusion, a lot of hospitals want to reduce the cost; they will cut off a lot of equipment. So, it is will make the facility of their hospital is not enough the equipment for their patients. Therefore, the reputation of this hospital will be drop and bankrupt.

Finally, costing is a very important for a hospital because it is place of the health - care. So the government must take action to prevent the hospitals to decrease their cost or corruption in their management fields.