Costs Likely to Decrease with Better Quality
Which costs are likely to decrease as a result of better quality?
a. inspection costs
b. warranty and service costs
c. maintenance costs
d. customer dissatisfaction costs
Answer:
The correct answer is d. customer dissatisfaction costs.
When the quality of a product or service improves, it leads to a decrease in various costs. Let's break down each option and see which costs are likely to decrease:
a. Inspection costs:Better quality means fewer defects and errors, resulting in reduced need for inspections, which in turn decreases inspection costs.
b. Warranty and service costs:With better quality, products are less likely to have issues or break down, resulting in fewer warranty claims and lower service costs.
c. Maintenance costs:Improved quality means products require less maintenance, leading to a decrease in maintenance costs.
d. Customer dissatisfaction costs:When quality improves, customers are more satisfied with the product or service, which reduces the costs associated with customer dissatisfaction, such as refunds, returns, and negative word-of-mouth.
Customer satisfaction is a key aspect of quality, and even with improvements in other areas, there may still be costs associated with addressing customer dissatisfaction.