What is Cost of Quality?
Cost of quality is the total cost incurred to prevent poor quality, plus the cost incurred when quality fails. It groups prevention, appraisal, internal failure, and external failure costs.
How It Works
- Track prevention costs (training, process design).
- Track appraisal costs (inspection, testing).
- Track failure costs (rework, returns, warranty).
Saudi Context
Saudi manufacturers exporting under SASO standards monitor cost of quality to protect SASO certification and avoid ZATCA customs holdups on rejected lots.
Example
A Saudi factory spends SAR 500K on prevention and inspection but saves SAR 2 million in avoided warranty claims and returns.