In the Iceberg Model of Poor Quality, there are only two visible costs of poor quality- customer returns and waste.

Question

In the Iceberg Model of Poor Quality, there are only two visible costs of poor quality- customer returns and waste.

BlackTom AI · Accepted Answer

The statement presented is a claim about the Iceberg Model of Poor Quality, asserting that there are only two visible costs of poor quality—customer returns and waste.
First, consider what the Iceberg Model typically distinguishes: visible costs (or obvious costs) are those that are easily measured and observed, such as returns, scrap, rework, and downtime, along with external costs like warranty claims or customer complaints.
Second, the claim that there are only two visible costs is an oversimplification. In many formulations, more than just customer returns and waste are counted as visible costs. For example, internal failure costs include scrap, rework, re-inspection, and downtime, while external failure costs include warranties, repairs, returns, and field service.
Third, even within what are labeled as 'visible' costs, there are often multiple line items beyond just returns and waste. Waste itself can be categorized into scrap, rework, and downtime; returns can be part of external quality costs but are not the only external item. Additional costs like shipping, handling, or increased overtime to cover defects may also appear in the visible costs category depending on the framework.
Fourth, the essence of the Iceberg Model is that the visible costs are only a small portion of the total cost of quality, with a much larger set of hidden costs (such as lost opportunities, customer dissatisfaction, brand damage, and prevention/appraisal activities) lying beneath the surface. This supports the idea that focusing only on two items oversimplifies the model.
In summary, the statement is incorrect because the Iceberg Model does not restrict visible costs to just two items (customer returns and waste); there are several other visible costs (like scrap, rework, downtime, and warranty-related expenses), and the model emphasizes that many additional hidden costs lie beneath the surface.

RGA6233.20148.202525 Final Exam

In the Iceberg Model of Poor Quality, there are only two visible costs of poor quality- customer returns and waste.

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