The
quality costs classified into the four groups that are namely:
- Prevention costs: These expenses related to costs
of design and manufacturing that are directed toward the prevention of
non-conformance and defect, such as quality planning; new-products review;
process planning; process control; quality audits, and training. The costs
incurred to keep failure and appraisal costs to a minimum.
- Appraisal costs: Those costs are included the expenses
of measuring, evaluating, or auditing products of product or process,
which assure the products or services are conformance with the specified
requirements, standards, and the requirements of the customer in general.
The costs incurred to determine the degree of conformance to quality
requirements.
- Internal failure costs: These costs happen when the
outcome of product or service process cannot meet designed quality
standards and the requirement of the customer, and this failure is found
before transfer and delivery to the customer. These costs are Included in
this area are scrap; rework; repair; downtime; defect and scrap
evaluation. The costs of deficiencies discovered before delivery.
Associate deficiencies or nonconformities with the failure to meet
explicit requirements or implicit needs of external or internal customers.
- External failure
costs: These expenses generate when products or services cannot satisfy
customer or specified requirements but the defects could not be discovered
till delivery to the customer. These expenses are customer returns and
allowances; repair and servicing; warranty claims; complaints, and
image. The costs associated with deficiencies found after product is
received by the customer. These also include lost opportunities for sales
revenue.
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