EXERCISE 2-13 (15 MINUTES)

2. The initial effect of emphasizing prevention and appraisal was to reduce

external failure costs and increase internal failure costs. The increase in

appraisal activities resulted in catching more defective units before they

were shipped to customers. As a consequence, rework and scrap costs

increased. In the future, an increased emphasis on prevention should

result in a decrease in internal failure costs. And as defect rates are re-

duced, resources devoted to appraisal can be reduced.