Appraisal costs are a component of the cost of quality, and include those costs associated with maintaining the quality of a product or evaluating an organization's ability to maintain a desired level of quality in its products. Such costs generally include inspection and testing, but may also extend to costs of quality audits and even costs associated with quality certifications such as ISO 9000.
In the past, it was often believed that a company needs to increase its appraisal costs in order to improve quality. However, if appraisal includes only testing and inspection, then quality of the product reaching the customer may improve, but only because defective products are caught before they are shipped out. Today, it is generally realized that improvements in quality depend upon increased prevention of defects, and that appraisal costs can generally remain the same, or even decrease as the number of defects decreases due to prevention efforts.
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© 2000 Kluwer Academic Publishers
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(2000). APPRAISAL COSTS . In: Swamidass, P.M. (eds) Encyclopedia of Production and Manufacturing Management. Springer, Boston, MA . https://doi.org/10.1007/1-4020-0612-8_48
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DOI: https://doi.org/10.1007/1-4020-0612-8_48
Publisher Name: Springer, Boston, MA
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