External failure costs are incurred when poor-quality goods or services are passed on to the customer and include costs of returns, warranty costs, and management time handling customer complaints.

Question

Quizplus · Accepted Answer

External failure costs are indeed incurred after a product or service has reached the customer and include costs related to returns, warranties, and handling complaints, as they arise from delivering poor-quality products or services.

External Failure Costs Are Incurred When Poor-Quality Goods or Services