Internal failure costs

Internal failure costs are those costs of quality associated with product failures that are discovered before a product leaves the factory. These failures are discovered through the firm's internal inspection processes. Examples of internal failure costs are:

• Failure analysis activities
• Product rework costs
• Product scrapped, net of scrap sales
• Throughput lost

Internal failure costs are one of the four costs of quality. The other three costs are prevention costs, appraisal costs, and external failure costs.