Question

Define the two major categories of quality cost and how they relate to each other.

Answer 1

Some of the major categories of quality cost are:

• Prevention Cost: is nothing but the cost which an organization incurs in order to ensure that failure does not occur, the system keeps on moving smoothly and as expected and to avoid any issue from occurring this is the cost incurred. Example: The employees are trained for that specific skill that would be required in the job and hence it is ensured that lack of a particular skill is not a reason to perform well.
• Internal Failure Cost: is the cost that a defective product carries with itself i.e. any organization that has produced a defective product will incur the cost of that product because that product is now not saleable and goes in scrap.

They are somewhat related to each other in the sense that internal failure can be prevented by adequate training and making the quality process more robust and hence if the prevention cost is adequately spent on training and quality improvement then internal failure cost can be reduced.