Of the following components of total quality cost, which is most damaging to a company attempting to achieve a reputation as a world-class manufacturer?
A) Prevention costs.
B) Appraisal costs.
C) Internal failure costs.
D) External failure costs.

Question

Quizplus · Accepted Answer

External failure costs, such as warranty claims, recalls, and customer complaints, undermine a company's reputation and can result in lost sales and market share. This is why minimizing external failure costs is crucial for companies striving to achieve a reputation as a world-class manufacturer. Prevention and appraisal costs, while important, are aimed at preventing defects from occurring and detecting them early on, respectively. Internal failure costs, while costly, are not as damaging to a company's reputation as external failure costs.

Of the Following Components of Total Quality Cost, Which Is