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
    • Training
    • Equipment
    • Time to do it right
    • ..
  • Appraisal Cost
    • Testing
    • Distrupting testing loss
    • Inspection

Under the cost of poor quality falls

  • Internal failure cost (failure found by the project)
    • Rework
    • Scrap
  • External failure cost (failure found by the customer)
    • Liabilities
    • 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.
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