PMI Project Management Professional Practice Question

The correct answer is True. The Cost of Quality (COQ) is indeed composed of both internal and external failure costs, along with prevention and appraisal costs.

COQ consists of four main categories:

1. Prevention costs: Expenses incurred to prevent defects from occurring (e.g., quality planning, training).
2. Appraisal costs: Costs associated with evaluating product or service quality (e.g., inspections, testing).
3. Internal failure costs: Expenses that occur before delivering the product or service to the customer (e.g., rework, scrap).
4. External failure costs: Costs that arise after the product or service is delivered to the customer (e.g., warranty claims, customer complaints).

Both internal and external failure costs are essential components of the COQ framework. Internal failure costs represent quality issues caught before delivery, while external failure costs reflect problems discovered by customers. By including both, the COQ provides a comprehensive view of quality-related expenses throughout the product or service lifecycle.