What costs are incurred when products and services fail to either conform to requirements or satisfy customer needs after being delivered to customers?
A) appraisal costs
B) prevention costs
C) internal failure costs
D) external failure costs

Question

Quizplus · Accepted Answer

External failure costs are incurred when products and services fail to meet customer requirements or satisfy customer needs after being delivered, leading to complaints, warranty claims, returns, and repairs. These costs can include expenses related to handling complaints, replacing or repairing products, legal proceedings, damage to reputation, and loss of future sales. Therefore, it is important for companies to invest in quality control measures and improve their products and services to reduce external failure costs.

What Costs Are Incurred When Products and Services Fail to Either