If sourcing internally, firms must estimate the costs of ________ prevention, the costs of _____________, the cost of ___________, and the cost of ____________.

Question

Quizplus · Accepted Answer

When sourcing internally, firms must estimate the costs of preventing defects, the costs of appraising quality, the costs of internal failure, and the costs of external failure. These costs are associated with the four types of quality costs: prevention (preventing defects from occurring), appraisal (checking for defects), internal failure (defects found before the product is delivered), and external failure (defects found after the product is delivered). Only option B correctly identifies these four types of quality costs.

If Sourcing Internally, Firms Must Estimate the Costs of ________