When a manufacturer discovers defects during manufacturing in the wooden toys the company is producing, and redesigns the process to remove the causes of the defect, the manufacturer is incurring ______. A) TQM costs B) Warranty costs C) External failure costs D) Internal failure costs
Answer (1)
The situation presented in the question is related to quality costs in a manufacturing process. When a manufacturer identifies defects during the production of wooden toys and subsequently redesigns the process to eliminate the causes of those defects, it falls under the category of 'Internal Failure Costs.'
Let's understand the different types of quality costs to clarify why 'Internal Failure Costs' is the correct choice:
TQM Costs (Total Quality Management Costs): These costs are associated with preventing defects through an overarching quality management strategy. They may include training, planning, and process changes before defects occur.
Warranty Costs: These are costs incurred after the product has been delivered to the customer. They include the replacement or repair of defective products that are returned under warranty.
External Failure Costs: These costs occur when defects are found after the product has reached the customer. They include warranty claims, returns, and complaints handling.
Internal Failure Costs: These are costs related to defects found before the product is shipped to the customer. This includes scrap, rework, and the redesign of processes to eliminate defects.
In this case, since the defects are discovered during the manufacturing process and before the products are delivered to customers, the costs to redesign and fix these processes fall under 'Internal Failure Costs.' This internal adjustment ensures that the production line is free from future occurrences of similar defects, improving the overall quality before shipping.
Therefore, the correct multiple-choice option is D) Internal failure costs .
