Which of the following quality option costs BEST identifies the expense of Inspecting deliverables
to prevent flawed products from reaching the customer?
A.
Actual costs
B.
Failure costs
C.
Appraisal costs
D.
Contract costs
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Cost of Quality
Cost of quality is the total cost of all the work required to assure the project meets the quality standards. These costs include all the work required, planned and unplanned,
to meet these standards, as well as the cost of nonconformance, rework, and quality
assessments. The three types of costs associated with quality are prevention, appraisal,
and failure:
Prevention Prevention costs are the costs of keeping defects out of the hands of the
customers. These costs include quality planning, training, design review, contractor or
supplier costs, and any product or process testing you may perform.
Appraisal Appraisal costs include the activities performed to examine the product or
process and make certain the quality requirements are being met. Appraisal costs include
inspection, testing, and formal quality audits.
Failure Failure costs include the cost of activities needed if the product fails. Failure
costs are also known as the cost of poor quality. There are two categories of failure costs:
internal and external. Internal failure costs result when the customer requirements are
not satisfi ed but the product is still in the control of the organization. Some examples of
internal failure costs include corrective action, rework, scrapping, and downtime.
External failure costs occur when the product has reached the customer and they determine
it doesn ’ t meet their requirements. Example external failure costs include inspections at the
customer site, returns, and customer service costs.
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