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28 September, 05:17

Which of the following is not an example of an external failure cost? Warranty claims Handling complaints Loss of customer goodwill Scrap and rework during production Price discounts to offset inferior quality

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  1. 28 September, 05:37
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    An example of external failure cost is:

    Scrap and rework during production

    Explanation:

    External failure cost is the concept used in the finance, business, and management sciences to qualify the loss of a business after a product is sold. Examples involve lawsuits, legal fees, returns, etc. Now, the argument behind the answer is that warranty claims on handling are not part of the company, but the carrier and the retailer company. but scrap and rework during production is an external failure cost because after the production and selling scrap and rework during production will remain.
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