A cost analysis on the relationship between cost and quality in the manufacture of the WGU Widget 3.0 has been conducted and the findings will be discussed in this memo.
Taking into consideration the costs associated with the production of Widget 3.0, we will discuss the following: Appraisal Costs, Prevention Costs, and finally Failure Costs both internal and external.
Appraisal costs relate to the costs of ensuring quality and for uncovering defects. These costs are related to inspections, testing, test equipment, labs, quality audits, and field testing. Prevention costs include both planning and administrative systems, interaction with vendors, training, quality control procedures, and emphasis on design. Failure costs are broken into two subcategories, Internal and External failure. Internal failures include defective material, incorrect machine settings, carelessness, and mishandling of materials. External failure is associated with defective products or poor service provided to the customer.
Appraisal costs and quality considerations for Widget 3.0 production
Analysis indicates 45% of the final cost of the product is attributable to inspection, testing, and quality audits. This portion of the cost is broken down into 80% to inspection of materials received from vendors, 15% quality audit of the final product, and 5% testing of each component of Widget 3.0.

Prevention costs associated with Widget 3.0
35% of the final costs are considered Preventative in nature. 75% are administrative systems and planning with the remaining 25% split between training and quality control.
Failure costs related to Widget 3.0
The final 20% of the overall costs associated with the production of Widget 3.0 are divided between Internal and External failure. 80% of these failure costs are directly attributable to internal failure. These costs are correlated to substandard