Premium Essay

Qht1 Task 1

In: Business and Management

Submitted By Jenn0204
Words 327
Pages 2
Memo
TO: John Doe – Supervisor
FROM: Jennifer Crawford
Date: May 20, 2015
Re: WGU GHT1 Task 1

There are three types of costs when quality considerations are made, appraisal costs, prevention costs, and failure costs. Failure costs also include external failure and internal failure. A detailed explaination is included below:

Appraisal costs are costs that the company incurs to ensure qaulity or uncover defects. This includes but is not limited to costs such as testing equipment, inspections of materials, labs, quality audits, field-testing, and other inspections costs.
Prevention costs are the costs associatied with preventing defects from occurring. This includes costs such as designing a better quailty product, increased maintenance on equipment, quality control procedures, training of employees, planning and administration procedures, working with vendors, and any extra time that is used that is devoted to decreasing the probablilty of a defective workmanship.
Failure costs are incurred bye defective parts or products or by faulty services.
Internal failures are failures that are discovered during the production process or prior to the customer ever coming into direct contact with the product. There are many reasons that internal failures may occur which range from defective materials, incorrect methods or processing, or faulty equipment.
External failures are failures that are discovered after the customer has the product. External failutres can become very costly to the company due to the costs of the warranty work, liability payments to the customers, providing the customers with replacement products, and the cost of handling customer complaints. The three types of costs are absolutely not independent from one another. There is a trade-off relationship between the costs. An example of this would be an increase in prevention and appraisal…...

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