Measuring the cost of quality in a hotel restaurant operation

Abstract

Purpose -The objective of this research is to apply the cost of quality (COQ) concepts in a hotel restaurant environment using the PAF (prevention, appraisal, and failure costs) model. Then use the percentage of sales approach to evaluate the significance of the COQ measures in the PAF model. Design/methodology/approach -This research involved reviewing available literature on the COQ framework. Then through the process of interviews and secondary data collection, an analysis of the COQ measures in the PAF model was accomplished. Findings -While researchers suggested that the COQ should be 2 to 4 percent of sales, the actual findings were 12 to 16 percent over a two-year period. These findings help the restaurant quality management team to reevaluate the quality of food and services, and provide justification for more investment in prevention activities. Practical implications -The practical implication from this study was that an investment in prevention activities in the PAF model for the restaurant did lead to reduction in failure costs (internal and external) and appraisal costs. Originality/value -This study demonstrates that the COQ measures used in the PAF model can improve the quality of food and services provided to the restaurant customers, and therefore, result in improvement in overall profitability.

Societal Norms, Need for Closure, and Service Recovery

“…Specifically, the authors investigated the degree of tolerance for socially deviant employee behaviors. Previous research has demonstrated that service failures caused by deviant employee behavior can lead to economic losses (Murphy 1993;Ramdeen et al 2007), customer dissatisfaction (Bitner et al 1990), negative word of mouth (HarrisonWalker 2001), and customer switching behavior (Keaveney 1995). Recent research in service recovery demonstrates the need for understanding personality traits when examining consumer reactions to service failures (Mittal et al 2008).…”

“…Previous research has demonstrated that service failures caused by deviant employee behavior can result in substantial losses for the company (Murphy 1993). Employee-related service failures have been shown to lead to customer dissatisfaction (Bitner, Booms, and Tetreault 1990), negative word of mouth (Harrison-Walker 2001), customer switching behavior (Keaveney 1995), and revenue loss (Ramdeen, Santos, and Chatfield 2007).…”

The cost of mindfulness: A case study

“…1 proposes that mindfulness implementations are preventative measures and lead to increased (P) costs that result in reduced process variance, increased reliability, and reduced defects. Although other healthcare-related studies use PAF (i.e., Ramdeen et al, 2007;McLaughlin and Kaluzny, 2004, p. 32), this study is the first to examine the relationship between mindfulness, process variance, and costs using PAF. This framework necessitates the examination of a possible direct effect of mindfulness on process variance.…”

The Response of Hotels to Increasing Food Costs due to Food Shortages

“…For instance, Johnson and Chambers (2000) identified benchmarking as a continuous, systematic management process that enables food and beverage managers to ascertain current practice. In a recently conducted study, Ramdeen et al (2007) measured cost of quality (COQ) concepts in a hotel restaurant environment over a 2-year period using the prevention, appraisal and failure (PAF) model. Their findings indicated that COQ accounts for 12-16% of sales.…”

“…Overproduction and inadequate purchasing both lead to costly food wastage (Hu, Chen, & McCain, 2004), affecting a hotel's food costs and inevitably its bottom line. Hotel restaurants also need to maintain the quality of food and services to retain or increase customer satisfaction levels and ultimately boost profitability (Ramdeen, Stantos, & Chatfield, 2007). Ramdeen et al (2007) suggested it is necessary to allocate more resources to prevention activities such as quality training and supplier evaluation.…”