Cost of Quality: PMP Topics to Learn for the Exam

cost of quality pmp

Cost of quality, or COQ, refers to the total costs needed to bring products or services up to standards defined by project management professionals. To determine the cost of quality, combine the costs of conformance and the costs of non-conformance. A closer look at both these costs will help you better prepare for the cost of quality PMP exam questions.

Costs of Conformance

The costs of conformance are ones needed to complete various activities that help the project meet quality requirements and avoid failing. There are two categories under the costs of conformance umbrella: prevention costs and appraisal costs.

    (1) Prevention costs- Examples include equipment and maintenance, planning, training, documentation, human resources, quality assurance, process control, etc.
    (2) Appraisal costs- Examples include evaluating products and services, completing inspections, field testing, implementing quality control, identifying and fixing defects before products get to market, destroying defective products, etc.

Costs of Non-Conformance

Less favorable than costs of conformance are costs of non-conformance. If you discover that your products or services are defective after they’ve been on the market, you need to spend money in order to remedy the situation. Therefore, you’re going to incur costs of non-conformance.

Similar to costs of conformance, there are two categories for costs of non-conformance: internal failure costs and external failure costs.

    1. (1)

Internal Failure Costs:

    The company incurs these costs when they identify defects before they reach consumers. For example, if you discover that a product is defective, you need to pay to have it repaired or reworked before shipping it out to customers. Thus, the costs of repairing the defective product are internal failure costs.
    1. (2)

External Failure Costs:

    On the other hand, external failure costs occur after customers receive a defective product or service. Some of these costs include warranty services, complaint handling, product recalls, liability judgments, etc. Unfortunately, external failure costs often lead to loss of your business’ reputation, too.

Prevention is Key!

As a project manager, prevention is of utmost importance. If you can detect problems early on, it’s going to save you time and money. So, to limit the cost of quality, focus on costs of conformance so you don’t incur more costs of non-conformance.

While preparing for the exam, consider the times that you’ve applied these ideas in your profession. Draw from this experience as you prepare to answer cost of quality PMP questions.

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