Cost of quality

Hidden Failure Costs Scrap Warranty Rework Decreased capacity Increased inventory Shop and field downtime Management time Engineering time Customer dissatisfaction Lost sales Lost customer trust

Cost of quality – categories 1 - Cost of achieving good quality Prevention Costs Appraisal Costs 2 - Cost of poor quality Internal failure Costs External failure Costs Quality costs fall into two main categories:

Conclusion: When the cost of achieving good quality increases; cost of poor quality decreases automatically.