In classifying the costs of quality at a company that manufactures sonar equipment, which of the following is considered an external failure cost?
A) the net cost of scrap and spoilage incurred during production.
B) the cost of repairs and replacements made during the warranty period.
C) the cost of debugging software errors found in the sonar equipment during inspection at the plant.
D) both the cost of repairs and replacements made during the warranty period and the cost of debugging software errors found in the sonar equipment during inspection at the plant.
E) none of the above.

Question

Quizplus · Accepted Answer

External failure costs are incurred after the product has been sold and delivered to the customer. The cost of repairs and replacements made during the warranty period is an external failure cost. Option A is considered an internal failure cost as it is incurred during production. Option C is a prevention cost as it is aimed at preventing defects before they occur. Option D is a combination of external and internal failure costs.

In Classifying the Costs of Quality at a Company That