Cost of quality

The sum of all costs associated with conformance and nonconformance. Cost of conformance includes prevention costs (employee training, tooling maintenance, planned preventive maintenance, suggestion awards) and appraisal costs (inspection, testing, gages and instrumentation, audit expenses). The cost of nonconformance includes internal costs (unscheduled maintenance, pre-shipment scrap and rework, workers’ compensation) and external costs (warranty, customer complaint investigation, rework of returned goods, and product liability insurance).