cost of quality

external costs

defects are discovered after shipment

internal costs

defects are discovered before shipment

detection costs

for inspection of purchased materials and during manufacture

prevention costs

for keeping defects from occurring in the first place

cost of quality

the cost-of-quality accounting system was created by Joseph Juran to convince top management of the need to address quality issues. he identified four categories of costs, and that external and internal failure costs account for 50-80 percent of the total cost of quality. to minimize the total cost, Juran advocated more attention be paid to prevention.