Measuring the cost of quality in a hotel restaurant operation

Abstract

PurposeThe 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/approachThis 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.FindingsWhile 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 implicationsThe 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/valueThis 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.