All of the following represent external failure cost EXCEPT the cost of:
A)Scrapping defective raw material.
B)Repairing items covered by warranty.
C)Replacing defective items found by customers.
D)Loss of goodwill and reputation.

Question

Quizplus · Accepted Answer

Scrapping defective raw material represents an internal failure cost, not an external failure cost. External failure costs are costs incurred after the product or service has been delivered to the customer, such as the cost of repairing items covered by warranty, replacing defective items found by customers, or the loss of goodwill and reputation.

All of the Following Represent External Failure Cost EXCEPT the Cost