Hi all,
I usually have problem classifying costs into correct classifications (prevention, appraisal, internal failure, external failure). I summarized here some costs with labeled classifications based on my understanding. I hope you can let me know if I'm wrong with any cost, and appreciate if you can add some more examples that can be easily confused.
Rework costs Internal failure
Warranty repair costs External failure (you provide warranty service when issues found by customers)
Product line inspection Appraisal (it help DETECT product issues)
Design engineering Prevention
Supplier evaluation Prevention
Labor training Prevention
Product testing Appraisal
Breakdown maintenance Prevention (it avoid the issues from happening)
Product scrap Internal Failure
Cost of returned goods External Failure
Customer support External Failure (because customers reach customer support once the issues happened. I'm not sure about this one)
Product liability claims External Failure (similar to warranty repair)
Thank you very much,
Kyle
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Kien Nguyen
Unemployed
Ottawa ON
Canada
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