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Where does the supply chain begin?
External Failure Cost
Costs incurred when a defective product or service is discovered after delivery to the customer, including returns, repairs, and lost sales.
Prevention Costs
Costs incurred to prevent defective units before they are produced. For example, reengineering products or production processes.
Appraisal Costs
Costs associated with the evaluation and inspection of products or services to ensure they meet quality standards.
Internal Failure Costs
Costs incurred when a defect is discovered before being received by a customer.
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