Which term below best describes the quality cost category for "lost profits from lost sales"?
A) Prevention costs
B) Appraisal costs
C) Internal failure costs
D) External failure costs

Question

Quizplus · Accepted Answer

"Lost profits from lost sales" is a result of external failure costs. These costs occur when a product or service fails to meet customer requirements and as a result, the company loses profit from lost sales. External failure costs are incurred after a product or service has been delivered to the customer and can include costs such as warranty claims and lost sales.

Which Term Below Best Describes the Quality Cost Category for "Lost