The following quality cost graph identifies the levels of four quality cost categories over a threeObj. 3 year period. External and internal failure costs have increased each year, while investments in prevention and appraisal activities have remained constant. Assume management wishes to reduce total quality costs in the long run.

Discuss various management decisions that could be made to better manage quality costs in the organization. What kinds of quality costs are controllable by management in the short run? Are other kinds of quality costs controllable by management in the long run? Explain your answers.

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150 100 50 Quality Cost Analysis External Failure Costs Internal Failure Costs Prevention Costs Appraisal Costs 0 2 3