What activities are encompassed by the Cost of Quality?

The concept of the Cost of Quality encompasses all quality-related activities within an organization, making it a comprehensive measure of the costs associated with ensuring that products are of good quality as well as the costs incurred due to poor quality. This includes various categories such as prevention costs, appraisal costs, internal failure costs, and external failure costs.

Prevention costs refer to expenses incurred to prevent defects in products or services, such as training and process controls. Appraisal costs are associated with measuring and monitoring activities to ensure quality, like inspections and testing. Internal failure costs occur when defects are found before products are delivered to customers, while external failure costs occur when defects are discovered after delivery, impacting customer satisfaction and resulting in returns and warranty claims.

By considering all these aspects, the Cost of Quality provides a holistic view of the financial repercussions of quality management practices in an organization, highlighting the importance of investing in quality improvements to reduce total costs and enhance customer satisfaction.