Abstract

The study aims to analyze the effect of quality costs on sales growth and profitability in regional
drinking water companies (PDAMs). This study uses a quantitative approach. The population in
this study is quality costs in 391 PDAMs throughout Indonesia with a sample of 325 PDAMs. The
data used is annual data from the realization of quality costs, sales growth rates, and profit
margins for three years, namely from 2015 to 2017. The results of this study indicate that quality
costs have a significant positive effect on PDAM sales growth, with the percentage of influence
equal to 66.7%, while the remaining 33.3% is influenced by other factors not observed in this study
and quality costs have a significant positive effect on PDAM profitability, with a percentage effect
of 59.5%, while the remaining 40.5% is influenced by other factors not observed in this study.