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What is Cost Of Poor Quality?

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Cost of poor quality are the costs that an organization incurs due to quality that isn't fit for purpose.

Iceberg Model

The cost of poor quality is often depicted as an iceberg model whereby quality issues show up as surface issues such as returned items. According the analogy, these surface costs are only a small fraction of the true costs of quality problems. Less visible costs such as low customer satisfaction, poor ratings, bad press, excess inventory, complaint handling, product liability and the need to redesign and rework a line of products may be an order of magnitude larger than these surface costs.

Practical Usage

Cost of poor quality is a means of calculating a return on investment for quality improvement or quality management. It is meant to be a comprehensive measurement that includes direct costs such as reworks, returns, downtime and indirect costs such as customer satisfaction and reputation.


The true and complete costs of low quality processes, products, services and experiences are difficult to measure qualitatively. As such, it may be more effective to build quality into the culture of an organization than to attempt an extensive framework for measuring quality problems.
Overview: Cost Of Poor Quality
Quality Management
A measure of the impact of low quality that isn't fit for purpose including both direct and indirect costs.
Building a business case to improve quality.
Related Concepts


This is the complete list of articles we have written about quality.
Conformance Quality
Cost Of Poor Quality
Credence Quality
Critical To Customer
Critical To Quality
Customer Satisfaction
Data Quality
Defect Density
Defect Rate
Defensive Design
Design Quality
Document Quality
Ease Of Use
Experience Quality
Figure Of Merit
Fit For Purpose
Information Quality
Non-Functional Testing
Operational Testing
Perceived Value
Planned Obsolescence
Product Quality
Quality Assurance
Quality Control
Quality Culture
Quality Examples
Quality Improvement
Quality Management
Quality Metrics
Quality Objectives
Quality Of Life
Quality Policy
Quality Requirements
Quality Testing
Recovery Paradox
Regression Testing
Reliability Engineering
Service Quality
Types of Quality
Acceptance Testing
Work Quality
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