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Environmental costs can be categorized as prevention costs, detection cost, internal failure costs and external failure costs.
Could you please explain them?
I have a problem understanding and identifying which costs relate to prevention costs, detection cost, internal failure costs and external failure costs?
Internal failure costs are costs of poor quality which do not affect the customer. So, for example, the cost of having to rework products because they were faulty.
External failure costs are costs of poor quality that affect the customer. So, for example, the cost of having to replace goods when the customer received faulty goods.
Detection costs are costs of checking goods before they are delivered to the customer (for example quality control inspections).
Prevention costs are the costs of improving production to avoid there being poor quality manufacturing (for example better training of the workers).
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