So the Prevention Cost which we talked earlier was related to preventing the problems happening in 2
the first place. 3
The next one here is the Appraosal Cost, Appraisal Cost is for maintaining the quality level. Whatever 4
checks and balances we have in our process to make sure that we maintain the quality those will be 5
considered as the appraisal cost. Appraisal Cost will consist of tests and inspection, whatever checking 6
you're doing in process, whatever checking you're doing as a final product all will be included as the 7
cost of appraisal. 8
In addition to that when you buy some material from your suppliers the suppliers sampling whatever testing 9
you're doing on those items which you purchased that also will be considered as the appraisal cost. 10
So the appraisal cost will also include auditing processes whatever you do to maintain the quality level 11
whatever you have. Some of the auditing of course might be considered as the prevention cost if you're 12
doing an audit of your supplier for selecting that supplier that's something which I would say that 13
you're doing something for prevention rather than appraisal. Appraisal will be once you have a supplier 14
in place and you are doing an audit on that particular supplier to make sure that the supplier is able 15
to provide you the consistent product that would be considered as appraisal. 16
So audit could basically fall in any of these two categories depending upon the purpose of that audit. 17
And both of these prevention and appraisal are basically targeting to eliminate or reduce the internal 18
and external failure costs.