The cost of poor quality is how providing a poor quality impacts the product. In other words, it is the financial impact that has made the wrong thing.
For choosing how much quality we need to have in a product we can use this cost of quality formula:
Cost of quality = Cost of good quality + Cost of bad quality
In other words, we can see that low quality can impact the cost but, too much quality in a specific case can be useless.
Under the cost of good quality falls
- Prevention cost
- Time to do it right
- Appraisal Cost
- Distrupting testing loss
Under the cost of poor quality falls
- Internal failure cost (failure found by the project)
- External failure cost (failure found by the customer)
- Warranty work
- lost business
For the exam remember that
- Cost of quality is the sum of the cost of good and poor quality;
- Cost of good quality is about prevention and appraisal cost;
- The cost of poor quality is about internal and external failure costs.