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:

Better quality means fewer defects and errors, resulting in reduced need for inspections, which in turn decreases inspection costs.

With better quality, products are less likely to have issues or break down, resulting in fewer warranty claims and lower service costs.

Improved quality means products require less maintenance, leading to a decrease in maintenance 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.