External failure occurs when a defect is not detected until the product is with the consumer. A product liability suit would arise as a result of a defective product that reaches a customer or customers, so it is an external failure cost.
External failure occurs when a defect is not detected until the product is with the consumer. Product field testing is a part of product design, so it takes place before full production begins and certainly before shipment of the finished product to a customer. Therefore, it is not an external failure cost. It is, rather, a prevention cost.
External failure occurs when a defect is not detected until the product is with the consumer. Lost sales and lost customers are a cost of providing consumers with an inferior product, so lost sales and lost customers are an external failure cost.
External failure occurs when a defect is not detected until the product is with the consumer. The cost of fulfilling warranty obligations is a cost of providing the customer with an inferior product, so warranty obligations are an external failure cost.
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