Question

A. How much amount is spent on external failure costs and explain how the company can overcome the cost?

Answer 1

As question have no values, we can't proceed further to calcuate amount spend on external failures.So i have explained the ways to reduce external failure cost.

Failure costs are those incurred by a manufacturer when it produces defective goods. There are two types of failure costs, which are internal and external. Internal failure costs occur before goods are shipped to customers, while external failure costs arise subsequent to shipment.

How the company can overcome the external failure cost?

Prioritize quality and reduce both cost and risk. Infinity solutions use a scientific, proven methodology to help you prevent problems—and the associated costs.

1. Cut down on scrap and rework. The more product you can get out the door, the better.
2. Boost ROI.
3. Reduce customer complaints.
4. Protect brand equity.