External Failure Cost Notes: Definitions & Explanations PDF | Download eBooks

Study External Failure Cost lecture notes PDF with total quality management definitions and explanation to study What is External Failure Cost?. Study external failure cost explanation with TQM terms to review total quality management course for online MBA programs.

External Failure Cost Notes:

Failure costs are the costs that are associated with product failures. Products can fail either at the end of the manufacturing process or after the product is sent to the customer. When the products fail after they each the potential user, the incurred cost is called external failure cost. Sometimes, a failed product results in an injury of the customer. In this case, a financial compensation is to be provided by the organization. Moreover, a customer can also sue an organization based on that injury. Organizations provide warranty to the customers in relation to the product failures. All these costs relate to the external failure costs.

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