Why Is It Difficult to Measure External Failure Costs? What

question 51

Essay

Why is it difficult to measure external failure costs? What are some nonfinancial measures quality management systems can use to gauge external failure?

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Definitions:

After-Tax Savings

The amount of money saved after all applicable taxes have been deducted, reflecting true savings available to an individual or entity.

After-Tax Accounting Rate of Return

A measure of an investment's profitability, taking into account the effects of taxes on the return.

Depreciation

Depreciation is the accounting process of allocating the cost of a tangible asset over its useful life, reflecting wear and tear, deterioration, or obsolescence.

Operating Costs

Operating Costs are expenses associated with the day-to-day functions of an organization, excluding direct material and labor costs.