This study examines the time series behavior of quality costs reported
by 49 manufacturing units of 21 companies. Analyses using both pooled
annual data and plant-specific quarterly data indicate that the major
ity of units in the sample achieved ongoing reductions in nonconforman
ce costs while maintaining or reducing reported prevention and apprais
al costs. These findings are consistent with recent quality-based lear
ning and continuous improvement models which suggest that, once an eff
ective quality program is established, companies can reduce nonconform
ance costs over time with little or no subsequent increase in conforma
nce expenditures.