Which of the following statements accurately describes the Cost of Poor Quality (COPQ)?

The Cost of Poor Quality (COPQ) refers to all costs associated with ensuring that a product or service is not of acceptable quality. This encompasses not just the costs incurred from internal failures, such as rework or scrap, but also external failures, including warranty claims, returns, and lost sales due to poor customer satisfaction. Furthermore, COPQ includes appraisal costs, which are expenses related to measuring and monitoring quality, and is intertwined with prevention costs, as these are investments made to avoid defects and enhance quality from the outset.

Therefore, stating that COPQ includes all quality-related costs captures the full spectrum of costs incurred when a product fails to meet quality standards, making it the most comprehensive and accurate representation among the options provided. This holistic view emphasizes the importance of understanding the various dimensions of quality costs, which can ultimately guide organizations in improving processes and reducing waste.