The concept of quality can be applied to a product when it is innocuous, nutritive and appetising, and if it satisfies the expectations of the market. The additional consideration of the process technology and competitiveness of the product require the application of economic engineering techniques to the Total Quality systems. The evaluation of the quality cost and its relationship to the level of product quality constitutes a useful tool for decision making intended to implement systems of quality assurance. Their analysis permits the establishment of the basis to evaluate the effectiveness of the proposed system and to optimise the technological process.

The main aims of this work are:

• To analyse quality, economic and technological parameters.
• To study the relationships of these parameters to the quality costs, total production costs, final product quality and selling price. 

The behavior of the quality costs in installed plants of the fishing sector is analysed using the PAF model (Prevention - Appraisal- Failure) developed by Feigenbaum. Quality costs are divided into controllable (prevention and evaluation) and resulting costs (external and internal failures). It is observed that the more representative controllable costs to reach a good level of product quality are inspection of raw material, training of labour and production control.

For food processing plants, the values found for low quality products, are 5, 25 and 70, expressed as a percentage of the CP, CA and CF, with respect to the total quality costs. If the actual relationship between the components of the costs of quality is the one exposed before, there are many failures, and no preventive actions. If the goal is to produce at a better quality level, these figures indicate the direction to follow: an increase in the preventive efforts that reduces the defects and simultaneously increases the quality.

Quality costs for the Argentine export fishing industry of the following manually elaborated products: frozen blocks of hake fillets (Merluccius hubbsi) and salted anchovy (Engraulis anchoita) are analysed. Data was collected in selected installed plants in Mar del Plata, the main Argentinean fish landing port.

Starting from the results obtained from previous work, a lineal correlation between initial raw material quality and final product quality is observed.

Parameters related to quality as raw material and final product quality, number of critical control points in the HACCP plan implementation, economic variables such as raw material and final product prices, investment, and production parameters as daily capacity, raw material yield and labor productivity were analysed.

In salting plants, the initial raw material quality was measured by the proportion of belly burst. An increase in yield for good input quality (average yield 85%) can be observed when compared with poor quality (average yield 70%). In terms of costs, the reduction in yield is extremely important, since raw material costs are on the average 74.7% of the total cost of the finished product (salted anchovy).

Processing optimum quality raw material reduces production costs (about 48%) and increases benefits through an increase in the quality of the product, even if a higher price is paid for the raw material.

The same behavior was also observed in freezing plants.

Results show that due to the poor quality of inputs failure costs are over 95 percent of total quality cost. For a very good quality level, failure costs descend below 20 percent of total quality cost. Without the recognition of the existence of failure costs, the optimisation of quality costs is impossible. In those cases, the usual actions of the companies are the reduction of prevention and appraisal costs that lead to lower quality levels. The company could decide an increase in the prevention and appraisal costs above the minimum point based on considerations such as volume of sales, safety, prestige (brand image) and company reputation.

Average total production cost per unit of product was analysed, showing that it continues reducing beyond the point of minimum quality cost per unit. This is due to the decrease of production costs by the increase in plant productivity associated with high levels of quality. Total quality costs descend from 40 to 21 percent of total production cost when the quality level is increased from bad to very good.

On the other hand, if the relationship between the final product quality and its selling price is considered, a maximum benefit point is obtained, not necessarily coincident with the previous minimum points. Consequently, an interval of quality level exists, within which the company will decide the optimum operation point according to the characteristics of demand function associated with the product.

Different minimum points for total quality cost and total production cost and a maximum benefit point are observed, indicating an advisable working zone within 80-90 percent of the optimum quality level.

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