If a company were to increase its appraisal costs by inspecting more units as the units are completed, the company's internal failure costs
A) would usually increase.
B) would usually decrease.
C) would usually remain the same.
D) could not be predicted.

Question

Quizplus · Accepted Answer

Increasing appraisal costs by inspecting more units as they are completed reduces the probability of defects passing through to customers, which would result in a decrease in external failure costs. However, this may also result in an increase in internal failure costs as more defects may be detected internally before products are released to the market.

If a Company Were to Increase Its Appraisal Costs by Inspecting