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The new paradigm posits that as a business’s processes improved to the point where products and
services were defect-free, the cost of appraisal fell. In effect, there was no need to inspect products or
services for defects. Furthermore, prevention costs held steady (or even decreased) as managers and
employees became more skillful at identifying and resolving problems. With the changing appraisal and
prevention cost curves, the total cost of quality curve began to look more like the one below. Note that in
this graph, the lowest total cost of quality occurs at the 0% defects level.
Diff: 2
Reference: 5.2 Total Cost of Quality
Keywords: prevention cost, appraisal cost, external failure costs, internal failure costs
AACSB: Application of Knowledge
LO: 5.2: Describe the different costs of quality, including internal and external failure, appraisal, and prevention
costs.