What are failure costs?

Internal failure costs:- There are the costs which are incurred because of defects in the product before its shipment to a customer.

These include:

–          Scrap and rework.

–          Downtime costs,

b)        External Failure Costs:- There represent all costs incurred on defective products after it is deliberated to a customer.

–          Investigating and solve problem

–          Liability and penalties costs.