Question 01:
You have been supplying engines to an auto-production company. During an inspection at the client’s facility, a few of your engines failed testing. Therefore, they send you those engines for replacement. What kind of cost of quality is this?
A. Internal
B. External
C. Variable
D. Damaged
Answer: B
Since this fault was caught when you have delivered the product to the client, it will be known as an external cost.