In accordance with the PMBOK® Guide (Project Quality Management), the Cost of Quality (COQ) is divided into two main categories: Cost of Conformance and Cost of Nonconformance.
Cost of Nonconformance (also known as failure costs) refers to the money spent during and after the project because of failures. This is further subdivided into:
Internal Failure Costs: Failures found by the project team before the product is released to the customer (e.g., scrap, rework).
External Failure Costs: Failures found by the customer after the product is released. Liabilities, warranty claims, lost business, and repairs fall under this category. These are particularly damaging as they can lead to legal costs and a damaged organizational reputation.
Analysis of Distractors:
B. Inspections: This is a Cost of Conformance, specifically an Appraisal Cost. It is the money spent to assess quality and uncover errors before they reach the customer.
C. Training: This is a Cost of Conformance, specifically a Prevention Cost. It is an investment made to ensure the team has the skills to do the work right the first time, thereby preventing defects.
D. Equipment: Costs associated with the equipment needed to perform the work correctly or to test the product (e.g., specialized testing hardware) are generally considered Prevention or Appraisal costs, which fall under the category of Conformance.
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