One approach to increasing the quality of products and services in companies is the
application of a management system of quality costs. This tool is applied to improve
the economic results in the company and is considered also as a tool that identifies key
areas where the company should direct investment into quality improvement
programs. The following article focuses on markets for optical equipment, using
action research. The chosen Czech company’s management approach included the
implementation of cost management, with the aim of reducting costs of prevention and
costs of appraisal and failure. This approach is known as the PAF model. The
implementation of the PAF model revealed the true cost structure of quality costs and
their real evaluations over time, in this case the period of 2010 – 2014; it also
identified key areas for improvement.The greatest potential for improvement was
hidden in a category of internal failure costs. In this category the annual costs amount
to an average of 7,174 % of sales during the period. In the last part of the article, the
costs of quality were analyzed against the sales of company (including material
losses). Ultimately, the hypotheses in sections 4.3.1 and 4.3.2 were validated and
based on these analyses the current state of the process was assessed and
recommendations to streamline were presented.