Since we already got to the point of cost vs quality, I thought it is the right time to mention Taguchi's (successful) attitude towards this subject.
Taguchi's (Japan's) approach to quality is based in the "total cost to society". When the consumer's cost would rise while the producer's cost is falling, Taguchi adds both and gets what is called the "loss" function. When this function reaches a minimum it quantifies, in fact, the optimum quality.
Loss could be quantified in relation to time lost, wear, ultimate strength, fuel economy, health problems, etc.
Following this phylosophy, if someone steals $10, the net loss to society is apparently zero; someone has a $10 loss while the thief has a $10 gain. If, however, the manufacturer causes an additional loss to society, everyone in society has suffered some loss.
Thus, a producer who saves less money than the customer spends on repairs has done something worse than stealing from the customer...
Take the case of Japan's position in the worldwide economic competition. It is an island with a large group of people but otherwise limited natural resources.
The method they selected to survive and thrive is to import raw materials, add to their value by processing, and export high-value-added products (cars, TV sets, etc.).
Their success is due in part to the efficiency of this process. A low loss to society fits neatly within the niche of competing effectively in a value-added product area.
In Taguchi's mathematical technique the loss function entails two aspects of quality management within a factory: the variance, and the center in the distribution.
It is the engineers' job to establish the variance before the start of production, and to improve it as time goes on by off-line quality control. The second is the responsibility of the manufacturing people on a continuous basis, i.e., on-line quality control.
In short, Taguchi's strategic view of quality differs from the more traditional "conformance to specification", in the sense that it stresses a greater concern for "uniformity of products" i.e., a narrower tolerance.
It considers the relationship of variability to customer desires, and looks for a method of quantifying the value of quality by the use of a loss function and a continuous reduction in variance (factory's tightening of tolerances).
The descriptive statistics being the average and the variance. One probable quagmire in this approach lies in the measurement (repeatability and reproducibility) and interpretation of data.
The book I mentioned in a previous post brings numerous examples where Taguchi's approach was successfully applied.
As it has been already said in previous posts, the cost to society is always lower when making the product right at the factory than to find a poor quality product when the customer has it in hand.
Better yet, it is always of a lower cost to society to make it right at the point of production than to have to rework within the factory at a later time.