External Failure Cost
External Failure Cost is a quality cost related to defects found after delivery to the customer. These costs are incurred because the product shipped failed to conform to quality requirements and may include warranties, repairs, recalls, legal actions and lost sales.
Quality Cost Report Definition: A report that details appraisal cost, prevention cost, internal failure cost, and external failure cost. Click here to read a detailed article about quality cost report.
Distribution of Quality Costs/Quality Cost Report: Learning objectives of this article: Prepare and interpret a quality cost report. How to Distribute Quality Costs? A company’s total quality cost is likely to be very high unless management gives this area special attention. Experts say that
External Failure Cost Definition: Costs that are incurred when a product or service that is defective is delivered to a customer.