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Failure cost is broken out into two categories; internal and external failure costs. Internal failure costs are those non-conforming products or services that are caught internally before reaching the customer and are remedied by discarding or repairing the defective item (Wikipedia, 2015). Examples of internal failure are final testing, scrapping the completed product or reworking the failed product. The costs associated with internal costs can be very expensive as the full process of producing the product has been incurred in addition to the final inspection costs that identified the failing product. External failure costs are products or services that are non-conforming that reach the customer. Examples of external failure costs are shipping, replacement costs, complaints in warranty, complaints out of warranty, product recall, loss of reputation and lawsuits. It is clear that external failure costs can represent the largest cost of quality. Not only has all the expense for full production been realized, but shipping costs, replacement cost and most notably the cost of poor quality reputation can dramatically effect a company’s relationship with its’ customers, This can cause lessened sales and in some cases large recall expenses and
