What are the four categories into which quality costs are broken in the total-cost-of-quality framework?

The four categories into which quality costs are divided in the total-cost-of-quality framework are prevention costs, appraisal costs, internal failure costs, and external failure costs.

Prevention costs are associated with activities that are implemented to prevent defects from occurring in products or services. These costs can include training, process engineering, and quality improvement initiatives. By investing in prevention, organizations aim to eliminate potential issues before they arise, ultimately reducing overall quality costs.

Appraisal costs involve the expenses related to measuring and monitoring activities to ensure that quality standards are met. This can encompass inspection, testing, and quality audits. These activities help in identifying defects before products reach the customer, contributing to improved overall quality.

Internal failure costs refer to costs incurred when products or services fail to meet quality standards before they are delivered to customers. This can include the costs of rework, scrap, and other corrections made during the production process. Minimizing these costs is crucial for maintaining profitability and operational efficiency.

External failure costs arise when defective products or services are delivered to customers, leading to returns, warranty claims, and loss of reputation. These costs can be particularly damaging as they involve the organization incurring expenses after the product has already been delivered, affecting customer satisfaction and long-term business success.