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Cost of Conformance
The costs incurred while building in, or ensuring, quality are called the costs of conformance.
Costs of conformance can include activities such as process documentation, training, inspections, and audits. This is money spent to avoid failures.
These activities each consume resource hours and thus need to be included in your project schedule, resource assignments, and cost estimates.
Cost of Non-Conformance
However, if there is a choice made not to conduct quality activities, there is a potential for costs associated with any resulting problems. These costs are referred to as the costs of non-conformance. This is money spent because of failures.
Costs of non-conformance can include things such as payments made out on warranties, re-work or scrap, and/or damage to reputation.
It is easy to see that there is a potential correlation between the amount of money spent on conformance versus the cost implications of non-conformance.
Needless to say, the costs of conformance need to be appropriate for the product or project.
