Cost of Quality

The term, cost of quaiity, includes all costs incurred over the life of the product by investment in preventing nonconformance to requirements, appraising the product or service for conformance to requirements, and failing to meet requirements (rework). Failure costs arc often catcgorizcd into interna! (found by the projcct) and externa! (found by the customer.) Failure costs arc also callcd cost of poor quality. Figure 8.2 provides some examples to consider in each area.

Cost of Conformance

Cost of Nonconformance

(Build a quality product)

• Document processes

Appraisal Costs

(Assess the quality)

• Destructive testing loss

• Inspections

(Failures found by the product)

External Failure Costs

(Failures found by the customer)

• Liabilities

• Warranty work

Money spent during and after the project because of failures

Money spent during the project to avoid failures

Figure 8-2. Costs of Quality

Figure 8-2. Costs of Quality

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Project Management Made Easy

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