Zhang, Kun / May 5, 2015 8/448/8

Prevention costs are investments made to keep nonconforming products from occurring and reaching the customer, including the following specific costs:
• Quality planning costs, such as salaries of individuals associated with quality planning and problem-solving teams, the development of new procedures, new equipment design, and reliability studies
• Process control costs, which include costs spent on analyzing production processes and implementing process control plans
• Information systems costs expended to develop data requirements and measurements
• Training and general management costs, including internal and external training programs, clerical staff expenses, and miscellaneous supplies

Appraisal costs are those associated with efforts to ensure conformance to requirements, generally through measurement and analysis of data to detect nonconformances. Categories of appraisal costs include the following:
• Test and inspection costs associated with incoming materials, work-in-process, and finished goods, including equipment costs and salaries
• Instrument maintenance costs due to calibration and repair of measuring instruments
• Process measurement and control costs, which involve the time spent by workers to gather and analyze quality measurements
Internal failure costs are incurred as a result of unsatisfactory quality found before the delivery of a product to the customer; some examples include the following:
• Scrap and rework costs, including material, labor, and overhead
• Costs of corrective action, arising from time spent determining the causes of failure and correcting production problems
• Downgrading costs, such as revenue lost when selling a product at a lower price because it does not meet specifications
• Process failures, such as unplanned machine downtime