Question

Listed below are eight components of the total cost of quality. In the spaceprovided identify each as a cost of prevention, appraisal, internal failure, or extemal failure 1. Product design 2. Product returns due to defects 3. Inspection of raw materials shipments 4. Employee training 5. Rework of defective units prior to shipment 6. Estimated lost sales due to poor quality 7. Warranty expense 8. Inspection of finished goods 9. Scrap

Answer 1

ANSWER:

• In the given question we have to identify each cost into different categories of total cost of quality
• We need to identify which cost is categorized under cost of prevention, appraisal, internal failure or external failure
• Prevention cost is that cost which is incurred to prevent any abnormal cost in future
• Appraisal cost is that cost which incurred in actual production process to retain quality of product
• Internal Failure cost is that cost which incurred before actual shipment of product to customer
• External Failure cost is that cost which incurred after actual sale of product
• Thus, based on above categories, we can identify each given cost into following quality costs

Particulars	Type of Cost
1. Product design	Prevention Costs
2. Product returns due to defects	External Failure Costs
3. Inspection of raw material shipment	Appraisal Costs
4. Employee training	Prevention Costs
5. Rework of defective units prior to shipment	Internal Failure Costs
6. Estimated lost Sales due to poor quality	External Failure Costs
7. Warranty Expense	External Failure Costs
8. Inspection of Finished Goods	Appraisal Costs
9. Scarp	Internal Failure Costs