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The price of a bond is equal to:
Quality of Conformance
The degree to which a product or service meets its design specifications and quality standards.
Design Specifications
Detailed descriptions of the materials, dimensions, and overall requirements necessary to construct or produce an item.
External Failure Costs
Costs incurred when a product or service fails to reach quality standards after being delivered to the customer, including returns, repairs, and lost sales.
Defective Products
Items produced that do not meet the quality standards set by the company or industry, resulting in waste or rework.
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