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8 - PROJECT QUALITY MANAGEMENT

8.1.2 Plan Quality Management: tools and techniques

8.1.2.1 cost-Benefit Analysis

The primary benefits of meeting quality requirements include less rework, higher productivity, lower costs,
increased stakeholder satisfaction, and increased profitability. A cost-benefit analysis for each quality activity
compares the cost of the quality step to the expected benefit.

8.1.2.2 cost of Quality (coQ)

Cost of quality includes all costs incurred over the life of the product by investment in preventing nonconformance
to requirements, appraising the product or service for conformance to requirements, and failing to meet requirements 8
(rework). Failure costs are often categorized into internal (found by the project) and external (found by the customer).
Failure costs are also called cost of poor quality. Figure 8-5 provides some examples to consider in each area.

Cost of Conformance Cost of Nonconformance

Prevention Costs Internal Failure Costs
(Build a quality product) (Failures found by the project)
• Training • Rework
• Document processes • Scrap
• Equipment
• Time to do it right External Failure Costs
(Failures found by the customer)
Appraisal Costs • Liabilities
(Assess the quality) • Warranty work
• Testing • Lost business
• Destructive testing loss
• Inspections Money spent during and after
the project because of failures
Money spent during the project
to avoid failures

Figure 8-5. cost of Quality

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©2013 Project Management Institute. A Guide to the Project Management Body of Knowledge (PMBOK Guide) – Fifth Edition 235

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