Most companies tolerate some level of defects by establishing an accepted quality level (AQL) for their production or service processes. AQL is the maximum limit for the number of defects or errors in a process. If the percentage of defects or errors is less than the AQL, the company considers that it has performed at an acceptable quality level.
Companies viewed as having world-class status in a particular endeavor seek to continuously tighten the accepted quality level. Thus, producing goods with zero defects and performing services with zero errors are laudable goals and ones toward which domestic and foreign companies are striving.
It is assumed that all units to be accounted for have either been transferred or are in ending work in process inventory; however, almost every process produces some units that are spoiled or do not meet production specifications. Phenomena in the production process also may cause the total units accounted for to be less than the total units to account for. In other situations (unrelated to spoiled units), the addition or expansion of materials after the start of the process may cause the units accounted for to be greater than those to be accounted for originally or in a previous department.