Which cost category is associated with preventing defects before they occur?

• A. Prevention costs
• B. Appraisal costs
• C. Internal failure costs
• D. External failure costs

Answer: (A)

Preventing defects before they happen is the focus of prevention costs. These are the proactive investments made to design, plan, and operate processes in a way that stops defects from occurring in the first place. Think of activities like quality planning, process design improvements, supplier quality assurance, training, mistake-proofing (poka-yoke), and statistical process control. By addressing root causes early, these costs reduce the likelihood of defects and the need for later corrections.

This is why it’s the best fit: it emphasizes stopping quality problems at the source rather than finding them after they occur (which would fall under appraisal) or fixing them after production or after delivery (which would be internal or external failure costs). Appraisal costs relate to inspecting and testing to identify defects, while internal and external failure costs cover the costs incurred when defects are found during production or after delivery, respectively.