About Cost Types

Cost types are used when you record the cost of quality (non-conformance) with both MRRs and CARs.

Commonly there are only a few costs types which are a broad, general classification of the costs. By contrast, QC cost activities are more specific.

These are examples of cost types:

• Prevention: Any cost associated with the prevention of quality problems, such as Engineering Process Planning, Quality Planning, Design Review, Contract Review, Product Qualification, Supplier Evaluation/Selection, Tool Control, Training, Quality Audits, Preventative Maintenance, Failure Analysis, Redesign, and Safety Programs.
• Appraisal: Any cost incurred while conducting inspections, tests, or other evaluations implemented to determine conformance to the quality requirements of the produced hardware, software, or services.
• Internal Failure (Prior to delivery to customer): Any costs incurred to correct a nonconformance as well as the evaluations, dispositions and consumer affairs aspects of such failures. These include consumer affairs, engineering and purchasing change orders, rework, scrap, warranty, product liability, field service, and inspection.
• External Failure (After delivery to customer): Any costs incurred to correct a nonconformance after the product has been deliver ed to a customer. This may include Warranty charges, complaint adjustment, cost of return, allowances, penalties, and rework.