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Costs of Quality - Failure, Appraisal, and Prevention Costs

#costsofquality #qualitymanagement #quality The costs of quality refer to the expenses incurred by an organization to ensure that its products or services meet customer expectations and are of a high standard. These costs can be categorized into four main types: prevention costs, appraisal costs, internal failure costs, and external failure costs. Here's a breakdown of each type: Prevention Costs: These are expenses incurred to prevent defects from occurring in the first place. The aim is to identify and eliminate potential issues before they lead to defects. Prevention costs include activities such as: Training and education of employees Process improvement initiatives Design and development reviews Quality planning and documentation Supplier evaluations and audits Implementing quality management systems Appraisal Costs: These are expenses associated with assessing the quality of products or services to identify defects or issues. Appraisal costs include activities such as: Inspection and testing of products Quality audits and assessments Calibration of measurement equipment Supplier quality monitoring Data collection and analysis for quality control Internal Failure Costs: These costs arise when defects are identified within an organization before products or services reach the customer. Internal failure costs include: Rework and repair of defective products Scrap and waste disposal Downtime due to process disruptions Loss of production time Reinspection and retesting External Failure Costs: These costs occur when defects are discovered by customers after products or services have been delivered. External failure costs can have a significant impact on an organization's reputation and can include: Warranty claims and repairs Customer complaints and returns Product recalls Legal expenses related to product liability Loss of future business opportunities 00:00 Intro 00:20 – Agenda 00:30 – Failure Costs 00:38 – Internal Failure Costs 01:07 – External Failure Costs 01:42 – Appraisal Costs 02:18 - Prevention Costs 03:16 – Key Takeaways Connect with me on Social Media!   / derrickhaywood     / drdhaywood     / drdhaywood