Quality Costs

Quality costs may be monitored by measuring costs of non-conformance and costs of conformance.

(A)Costs of non-conformance occur when the product fails to reach the design quality standards. Such costs may be subdivided into internal failure costs and external failure costs.

*** (1) Internal failure costs occur when the failure is detected before the transfer of the product to the customer.

**** (2) External failure costs occur when the failure to reach the required standards is not detected until after the product has been transferred to the customer.


(B)Costs of conformance are those incurred in reducing or eliminating the costs of non-conformance. Such costs may be subdivided into appraisal costs and prevention costs.

**** (1) Appraisal costs are those associated with the evaluation of items such as purchased material and services in order to ensure that they conform to the agreed specification.

**** (2) Prevention costs are those associated with the implementation of a quality improvement programme. Such costs are planned in advance and their implementation should lead to continuous improvement.





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