An increase in prevention costs may result in decreases in appraisal,internal failure,and external failure costs and a decrease in total quality costs.

Question

Quizplus · Accepted Answer

This statement is true. Prevention costs are costs incurred to prevent defects from occurring in the first place, such as investing in training, process improvement, or quality control technologies. By investing in prevention, the organization can reduce the likelihood of defects, which would otherwise result in appraisal costs (inspecting and testing products to detect defects), internal failure costs (such as scrapped or reworked materials), and external failure costs (such as customer complaints or product returns). Therefore, an increase in prevention costs can lead to a decrease in total quality costs due to lower costs of appraisal, internal failure, and external failure.

An Increase in Prevention Costs May Result in Decreases in Appraisal,internal