What is included in the concept of cost of quality?

The concept of cost of quality encompasses all costs associated with ensuring that a product or service meets quality standards. This includes three main components: prevention costs, appraisal costs, and failure costs.

Prevention costs are incurred to prevent defects and ensure that the production process operates smoothly. This may include costs related to training, process control, and quality planning.

Appraisal costs involve assessing and measuring the quality of products or services through inspections, testing, and evaluations to verify that they meet required specifications.

Failure costs arise when products do not meet quality standards and can be divided into internal failures (costs associated with defects found before the product is delivered) and external failures (costs incurred when defects are found after delivery, leading to returns, repairs, or warranty claims).

Understanding these components helps organizations improve their quality management practices, reduce defects, and ultimately cut costs associated with poor quality, leading to greater customer satisfaction and loyalty. This holistic view of quality-related costs makes option C the correct choice.